ADVANCED MICRO: Second Quarter Sales Estimated at $1.215 Billion----------------------------------------------------------------Advanced Micro Devices reported that sales for the second quarterended July 2, 2006 are expected to be $1.215 billion -- a 52%increase compared to the second quarter of 2005[1] and a 9%decline compared to the first quarter of 2006. The company'sprior guidance for the second quarter anticipated overall sales tobe flat to slightly down seasonally from the first quarter of2006.

Record AMD Opteron(TM) processor sales were driven by continuedstrong demand for single-, dual- and multi-socket configurationsfor servers and workstations. Sales of entry-level and mainstreammobile and desktop processors were down.

AMD will report its second quarter 2006 results after market closeon Thursday, July 20, 2006.

At the same time, the 'BB' rating on the class B-3 certificatefrom the same transaction is placed on CreditWatch with negativeimplications.

The lowered rating reflects actual and projected credit supportpercentages that are insufficient to maintain the previous rating.The current credit support for this class is 0.13%, down 35% fromits original credit support of 0.20%.

The rating on class B-3 is placed on CreditWatch with negativeimplications because Standard & Poor's expects additional lossesto result from high delinquencies. As of the May 2006distribution date, total delinquencies were 2.57%, with 0.89%categorized as seriously delinquent (90-plus days, foreclosure,and REO).

Standard & Poor's will continue to closely monitor the performanceof this transaction. If the delinquent loans translate intorealized losses, additional downgrades will be taken, depending onthe size of the losses and remaining credit support. In contrast,if the delinquent loans decrease without significant additionalrealized losses, the rating on class B-3 will be affirmed andremoved from CreditWatch.

The collateral for the transaction consists of a pool of 15-,20-, and 30-year conventional, fixed-rate mortgage loans securedby first liens on one- to four-family properties.

AMERICAN NATURAL: Defaults on Interest Payment for 8% Debentures----------------------------------------------------------------American Natural Energy Corporation failed to meet the interestpayment due on June 30, 2006 on its outstanding 8% ConvertibleSecured Debentures due Sept. 30, 2006.

In the event that the interest payment is not met today, July 10,2006, ANEC expects that Computershare Trust Company of Canada, theTrustee under the Indenture governing the Debentures, will notifythe debentureholders of an Event of Default pursuant to Section7.1(b) of the Trust Indenture for ANEC's failure to timely payinterest due on June 30, 2006. Under those circumstances, theTrustee may, and upon request in writing from the holders of notless than 25% of the principal amount of the Debentures thenoutstanding, will declare the outstanding principal of and allinterest on the Debentures and other amounts outstanding under theIndenture to be immediately due and payable.

In addition, the Trustee will have the right to enforce its rightson behalf of the Debenture holders against the collateral for theDebentures. The Debentures are collateralized by substantiallyall of ANEC's assets.

At June 30, 2006, the Debentures are outstanding in the principalamount of $11,025,000 and accrued and unpaid interest at that dateamounts to $220,500.

ANEC is continuing its efforts to raise additional equity to paythe current interest obligation, to fund its Louisiana drillingoperation and to re-finance other outstanding obligations.

About American Natural

Headquartered in Tulsa, Oklahoma, American Natural Energy Corp.(TSX Venture: ANR.U) -- http://annrg.com/-- is engaged in the acquisition, development, exploitation and production of oil andnatural gas.

Going Concern Doubt

As reported in the Troubled Company Reporter on May 22, 2006,PricewaterhouseCoopers LLP expressed substantial doubt aboutAmerican Natural Energy Corporation's ability to continue as agoing concern after it audited the Company's financial statementsfor the years ended Dec. 31, 2005, and Dec. 31, 2004. Theauditing firm pointed to the Company's substantial losses, workingcapital deficit and accumulated deficit.

At March 31, 2006, the Company's balance sheet showed $7,128,762in total assets and $21,039,132 in total liabilities, resulting ina $13,910,370 stockholders' deficit.

"The downgrade reflects our growing concern that AMTROL may not beable to refinance the majority of its $180 million of debt byDecember 2006 as required," said Standard & Poor's credit analystLisa Tilis.

The company has not yet announced a plan, and Standard & Poor'sbelieves it could prove difficult for AMTROL to obtain financinggiven its low ratings. The company is currently exploring variousmeans to recapitalize or restructure its debt, including thepossible sale of all or portions of the business. Ifunsuccessful, the company may default on its debt obligations.

APHTON CORP: Delivers Schedules of Assets & Debts to Del. Court--------------------------------------------------------------- Aphton Corp. delivered to the U.S. Bankruptcy Court for theDistrict of Delaware its schedules of assets and liabilities,disclosing:

Headquartered in Philadelphia, Pennsylvania, Aphton Corporation -- http://www.aphton.com/-- is a clinical stage biopharmaceutical company focused on developing targeted immunotherapies for cancer.Aphton filed for chapter 11 protection on May 23, 2006. (Bankr. D.Del. Case No. 06-10510). Michael G. Busenkell, Esq., at EckertSeamans Cherin & Mellot, LLC, represents the Debtor in itsrestructuring efforts. William J. Burnett, Esq., at FlasterGreenberg, represents the Official Committee of UnsecuredCreditors. Aphton estimated its assets and debts at $1 million to$10 million when it filed for protection from its creditors.

APHTON CORP: Borrows Funds to Get European Regulatory OK on Drugs-----------------------------------------------------------------The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Courtfor the District of Delaware allowed Aphton Corporation to borrowfunds from Receptor Biologix, Inc. Aphton will use the funds topay its consultants working to secure approval for Insegia withthe European Medicines Agency -- a European regulatory agencyanalogous to the Food and Drug Administration in the UnitedStates.

Ronald S. Gellert, Esq., in Wilmington, Delaware, told the Courtthat the Debtor does not have sufficient available sources ofworking capital to compensate Gillian Gregory and Paul Broome.The Debtor needs to pay $50,000 to Messrs. Gregory and Broome tosecure the approval, so it can market Insegia to other drugcompanies.

The loan will earn an 8% annual interest and matures on theearliest of:

* 10 days after the closing of the sale of Insegia, if the winning bidder is not Receptor Biologix;

* the closing date of the Insegia sale if Receptor Biologix wins the auction; or

* August 31, 2006.

The Court will conduct a hearing regarding the sale ofsubstantially all of the Debtor's assets at 11:00 a.m., EasternTime, on July 14, 2006.

Pursuant to Sec. 364(c) of the Bankruptcy Code, all obligationsunder the DIP facility will have superpriority status over allother claims against the Debtor.

Headquartered in Philadelphia, Pennsylvania, Aphton Corporation --http://www.aphton.com/-- is a clinical stage biopharmaceutical company focused on developing targeted immunotherapies for cancer.Aphton's products seek to empower the body's own immune system tofight disease. Aphton filed for chapter 11 protection on May 23,2006. (Bankr. D. Del. Case No. 06-10510). Michael G. Busenkell,Esq., at Eckert Seamans Cherin & Mellot, LLC, represents theDebtor in its restructuring efforts. William J. Burnett, Esq., atFlaster Greenberg, represents the Official Committee of UnsecuredCreditors. Aphton estimated its assets and debts at $1 million to$10 million when it filed for protection from its creditors.

APHTON CORPORATION: Selects Life Science as Investment Banker------------------------------------------------------------- Apthon Corp. asks the U.S. Bankruptcy Court for the District ofDelaware for permission to employ Life Science Group as itsinvestment bankers, nunc pro tunc to May 23, 2006.

Life Science will assist the Debtor in evaluating its businessmodel. The firm will also provide investment-banking servicesincluding, but not limited to, marketing and obtaining offers forthe sale or other transactions related to the sale process.

Life Science said it will charge the Debtor solely for itsservices on a percentage basis for a sale or other transaction.

The firm will receive a 5% fee on a sale less than $5,000,000 andan additional 3% for any amount in excess of $5,000,000.

Life Science will only be entitled to payment if the transactionapproved by the Court is closed with a party that Life Sciencebrought to the Debtor.

To the best of the Debtor's knowledge, Life Science does not holdany material interests adverse to the estate and is a"disinterested person" as that term is define in Sec. 101(14) ofthe Bankruptcy Code.

Headquartered in Philadelphia, Pennsylvania, Aphton Corporation-- http://www.aphton.com/-- is a clinical stage biopharmaceutical company focused on developing targeted immunotherapies for cancer.Aphton filed for chapter 11 protection on May 23, 2006. (Bankr. D.Del. Case No. 06-10510). Michael G. Busenkell, Esq., at EckertSeamans Cherin & Mellot, LLC, represents the Debtor in itsrestructuring efforts. William J. Burnett, Esq., at FlasterGreenberg, represents the Official Committee of UnsecuredCreditors. Aphton estimated its assets and debts at $1 million to$10 million when it filed for protection from its creditors.

In addition, the rating on the class M-10 certificate is placed onCreditWatch with negative implications. Lastly, the ratings onthe remaining classes from this series are affirmed.

The lowered rating and CreditWatch placements are the resultof realized losses that have continuously reducedovercollateralization. During the previous six remittanceperiods, realized losses have exceeded excess interest byapproximately $365,000. The combination of rapid principalprepayments and the failure of excess interest to cover monthlylosses has caused an overcollateralization deficiency of $6.959million.

As of the June 2006 distribution date, there was $3.016 millionin overcollateralization available, below its target balance of$9.975 million by approximately 70%. Severely delinquent loansrepresent 16.43% of the current pool balance, while cumulativerealized losses represent 1.32% of the original pool balance.

Standard & Poor's will continue to monitor the performance of thistransaction. If delinquencies continue to translate into realizedlosses, and the losses continue to exceed excess interest, therating agency will initiate additional negative rating actions.

Conversely, if excess interest is sufficient to cover monthlylosses in future remittance periods, and overcollateralizationrebuilds toward its target balance, the ratings will be affirmedand removed from CreditWatch.

Credit support for this transaction is provided through acombination of excess spread, overcollateralization, andsubordination. The underlying collateral consists ofconventional, fully amortizing, adjustable- and fixed-ratemortgage loans, which are secured by first-liens on one- to four-family residential properties.

ASARCO LLC: Encycle Trustee Can Employ American Appraisers----------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of Texas inCorpus Christi approved the employment of American Appraisers,Inc., as the appraiser for Mike Boudloche, the Chapter 7 trusteeof Encycle/Texas, Inc.

As reported in the Troubled Company Reporter on May 31, 2006,American Appraisers will assist the trustee in appraising andevaluating 61 acres of real property in Corpus Christi, Texas.

Mr. Boudloche said AAI employees have extensive knowledge andexperience in rendering real estate appraisals in Nueces County,Texas, and other areas.

ASARCO LLC: Encycle Trustee Can Hire Gayle Doraine as Accountant----------------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of Texas inCorpus Christi approved the employment of Gayle L. Doraine, CPA,PC, as accountant for Mike Boudloche, the Chapter 7 Trustee ofEncycle/Texas, Inc.

As reported in the Troubled Company Reporter on June 20, 2006,Mr. Boudloche said that in order to perform his services as theChapter 7 Trustee, he will need the services of a certified publicaccountant to:

AXM PHARMA: AMEX to Delist Securities on July 17------------------------------------------------The American Stock Exchange LLC(R) reported its finaldetermination to remove the common stock of AXM Pharma, Inc.from listing on the Exchange, and filed an application on Form 25to strike the Securities from listing with the Securities andExchange Commission. The delisting will become effective onJuly 17, 2006 unless postponed by the SEC.

Pursuant to its rules, the Exchange provided notice to AXM Pharma,Inc. of the decision to delist the Securities and an opportunityto appeal the decision to a panel designated by the Exchange'sBoard of Governors.

About AXM Pharma

Headquartered in City of Industry, California, AXM Pharma, Inc.(AMEX: AXJ) -- http://www.axmpharma.com/-- through its wholly owned subsidiary, AXM Pharma Shenyang, Inc., is a manufacturerof proprietary and generic pharmaceutical products, which includeinjectables, capsules, tablets, liquids and medicated skinproducts for export and domestic Chinese sales. AXM Shenyangis located in the City of Shenyang, in the Province of Liaoning,China. AXM Shenyang has an operating history of approximately10 years.

BAYOU GROUP: Committee Taps Preston Gates as Litigation Counsel---------------------------------------------------------------The Official Committee of Unsecured Creditors in Bayou Group,L.L.C., and its debtor-affiliates' chapter 11 cases asks the U.SBankruptcy Court for the Southern District of New York to retainPreston Gates Ellis & Rouvelas Meeds, L.L.P., as its litigationcounsel, nunc pro tunc to June 9, 2006.

Preston Gates will:

a) monitor litigation against third parties;

b) prosecute litigation against third parties, if authorized by the Committee and Debtors;

c) provide advice on avoidance and other claims being prosecuted by the Debtors;

d) handle general administrative matters for the Committee;

e) serve as the Committee's liaison with certain government entities, including the United Sates Attorney's Office, the SEC, the CFTC, and the Arizona Attorney General's Office;

f) serve as the Committee's liaison with the Debtors, including the monitoring of professional fees by the Debtors; and

g) defend any challenges to the receiver's right to serve as debtor-in-possession.

Headquartered in Chicago, Illinois, Bayou Group, LLC, operates andmanages hedge funds. The company and its affiliates filedfor chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. CaseNo. 06-22306). Elise Scherr Frejka, Esq., at Dechert LLP,represents the Debtors in their restructuring efforts. Whenthe Debtors filed for protection from their creditors, theyestimated assets and debts of more than $100 million.

BAYOU GROUP: Court Denies U.S. Trustee's Plea for Chap. 11 Trustee------------------------------------------------------------------The Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court forthe Southern District of New York denied the request of the U.S.Trustee for Region 2 to appoint a chapter 11 trustee in BayouGroup, LLC and its debtor-affiliates' bankruptcy proceedings.

The U.S. Trustee told the Bankruptcy Court that prior to filingfor chapter 11, the federal district court appointed JeffreyMarwil, Esq., at Jenner & Block, as the Debtors' federal equityreceiver.

The U.S. Trustee contended that in chapter 11 cases where a debtoris not in possession, the debtor's chapter 11 case must beadministered by a disinterested trustee with clear legal authorityto pursue litigation and propose a plan. The U.S. Trustee saidthat as receiver, Mr. Marwil has limited ability to act as afiduciary in a bankruptcy case. The U.S. Trustee argued that thiscan be construed as cause to appoint a chapter 11 trustee.

The U.S. Trustee also argued that appointment of a chapter 11trustee would be in the best interest of creditors.

Headquartered in Chicago, Illinois, Bayou Group, LLC, operates andmanages hedge funds. The company and its affiliates filed forchapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No.06-22306). Elise Scherr Frejka, Esq., at Dechert LLP, representsthe Debtors in their restructuring efforts. The OfficialCommittee of Unsecured Creditors is represented by Kasowitz,Benson, Torres & Friedman LLP. When the Debtors filed forprotection from their creditors, they estimated assets and debtsof more than $100 million.

Type of Business: The Debtor is a world leader in fitness entertainment, serving millions of people in thousands of fitness and athletic training centers, hotels and resorts, corporations, government, and community facilities.

The rating downgrades reflect Standard & Poor's assessment that CAno longer possesses an investment-grade financial policy in lightof the announced share repurchases. If the repurchase is financedsolely with debt, pro forma total debt to EBITDA could rise toabove the 4x range from about 2x currently. However, liquidity isprovided by cash of $1.9 billion as of March 31, 2006, comparedwith about $1.8 billion of debt securities.

Additionally, CA did not meet the deadline for filing its 10-K,and likely will need to restate previously reported results andreport additional material weaknesses. The delay is fromaccounting issues surrounding its stock option grants and revenuerecognition.

As a result of the filing delay, CA could violate the terms ofboth its bank agreement and bond indentures. Under the undrawn$1 billion revolving credit facility, an event of default occursif the lenders gives a notice of default, and CA has 30 days tocure from receiving a notice. Under the bond indenture, an eventof default will occur if CA receives a notice of default from thetrustee or the holders of 25% in aggregate principal amount of theoutstanding debt of such series, and CA does not cure within 90days of receiving the notice.

At the 'BB' rating level, Standard & Poor's expectation is that CAwill continue to generate free cash flow exceeding $1 billion, andmanage its debt levels at about 4x or below over the intermediateterm. The rating agency expects acquisitions to continue, albeitat a more moderate pace.

Standard & Poor's will meet with management to evaluate the proforma capital structure and financing plans, review management'sfinancial policy and growth initiatives, and the progress towardfiling its financial statements.

CALPINE CORP: First-Quarter Net Loss Increases to $589 Million--------------------------------------------------------------Calpine Corporation's first quarter loss for the year 2006 widenedto $589,400,000 from $168,700,000 from last year due to revenuedecline and reorganization costs, Dale Crofts and Jim Polson atBloomberg News reports.

According to Bloomberg, the first-quarter results includes$298,200,000 in reorganization costs before taxes, reflectingexpenses for assuming a power plant contract in Canada. TheCompany also disclosed a 34% drop in sales to $1.36 billion from$2.05 billion.

Since filing for bankruptcy on Dec. 20, 2005, Calpine has fired400 employees or 26% of its workforce. The Company also intendsto sell more than 20% of their plants to pare annual costs byabout $150,000,000. However, Reuters relates that Calpine isworking on a growth plan to generate positive operating cash flowin 2007.

CALPINE CORP: Rosetta Resources Wants to Assume Oil & Gas Leases----------------------------------------------------------------Rosetta Resources Inc. filed, on July 7, 2006, its objection inresponse to Calpine Corporation's motion in the U.S. BankruptcyCourt for the Southern District of New York to assume certain oiland gas leases under Section 365 of the Bankruptcy Code. Thehearing on the motion, which will include consideration ofRosetta's objection, is set for July 12, 2006.

As reported in the Troubled Company Reporter on July 4, 2006,Calpine Corporation filed, on June 29, 2006, a motion with theU.S. Bankruptcy Court for the Southern District of New York, whereits bankruptcy proceeding is pending. In the motion Calpine asksthe Court to assume certain oil and gas leases Calpine previouslyagreed to sell to Rosetta Resources Inc., to the extent the leasesconstitute "unexpired leases of non-residential real property" andwere not fully transferred to Rosetta as a result of Calpine'sfiling for bankruptcy.

Rosetta's Objection

In its objection, Rosetta asserts that oil and gas leasesconstitute interests in real property that are not subject to"assumption" under the Bankruptcy Code. While the court maynonetheless desire to enter a precautionary order, Rosetta alsospecifically requests the court eliminate from the order certainfederal offshore leases from the Calpine motion because theseproperties were fully conveyed to Rosetta in July 2005, and theMinerals Management Service has subsequently recognized Rosetta asowner and operator of these properties.

Rosetta further requests in its objection that any order enteredby the Court be without prejudice to, and fully preserve Rosetta'srights, claims and legal arguments regarding the characterizationand ultimate disposition of the remaining described oil and gasproperties. Since July 7, 2005, Rosetta has continuously operatedall of the properties held under the oil and gas leases describedin the motion.

In its objection, Rosetta has also urged the court to require theparties to promptly address and resolve any remaining issues underthe pre-bankruptcy definitive agreements with Calpine and hasproposed to the court that the parties seek arbitration (or atleast mediation) to complete:

(i) Calpine's conveyance of the cured consent properties to Rosetta;

(ii) Calpine's execution of documents and performing tasks required under "further assurances" provisions of the agreements with respect to certain of the oil and gas properties for which Rosetta has already paid Calpine; and

(iii) Resolving the final amounts, Rosetta is to pay Calpine, which Rosetta has concluded are approximately $80 million, consisting of roughly $68 million for the cured consent properties and $12 million in other true-up payment obligations.

About Rosetta Resources

Based in Houston, Texas, Rosetta Resources Inc. (NASDAQ: ROSE) -- http://www.rosettaresources.com/-- is an independent oil and gas company engaged in acquisition, exploration, development andproduction of oil and gas properties in North America. TheCompany's operations are concentrated in the Sacramento Basin ofCalifornia, South Texas, the Gulf of Mexico and the RockyMountains. Rosetta is a Delaware corporation.

CALPINE CORP: Wants Court To Further Extend Lease Decision Period-----------------------------------------------------------------Calpine Corp. and its debtor-affiliates ask the U.S. BankruptcyCourt for the Southern District of New York to further extend thetime within which they may assume or reject non-residential realproperty leases until the confirmation date of each applicableDebtor-Lessee's plan of reorganization.

As reported in the Troubled Company Reporter on April 12, 2006,the Debtors sought an extension of 90 days to assume or rejectunexpired leases of nonresidential real properties. The Courtextended the Debtors' lease decision period until July 10, 2006.

As of June 28, 2006, the Debtors filed six omnibus assumptionmotions and have rejected nine office leases and three officesubleases. However, the Debtors told the Court that due to thecomplexity of their corporate structure and business operations,they may be lessees under unidentified unexpired leases amongdomestic Debtor and non-Debtor affiliates in the United States.

The Debtors explained that premature rejection of intercompanyleases may result in potential defaults under their financingarrangements and may distract management from business planningnecessary to formulate a plan.

(b) for an opportunity to present formal briefing on the issues raised by the Objections, and for a hearing date.

As reported in the Troubled Company Reporter on June 27, 2006, theTort Litigants Committee objected to nine proofs of claim assertedagainst the Diocese of Spokane as secured claims or claims basedon an equitable lien:

Each Parish has a contingent claim against the Diocese of Spokanefor improvements to real property owned, possessed, and used byeach Parish under the Code of Canon Law, Ford Elsaesser, Esq., atElsaesser Jarzabek Anderson Marks Elliott & McHugh, in Sandpoint,Idaho, asserts.

In addition to Canon Law mandates, Mr. Elsaesser says there areseveral legal remedies under Washington state civil law, whichestablish each Parish's equitable interest in real propertylocated within Washington, including:

Each claim, Mr. Elsaesser contends, gives rise to the ability toseek the remedy of an equitable lien based on restitution conceptsand theories of unjust enrichment, but only after the harm hasoccurred. Mr. Elsaesser explains that the anticipated "harm,"which prompted the filing of contingent claims by the Parishes,was the prospect of loss of millions of dollars in improvements toreal properties as a consequence of the Court's property of theestate ruling on August 28, 2005.

That "harm" has not yet been realized, Mr. Elsaesser tells theBankruptcy Court. There is a possibility that it might never berealized, if the Bankruptcy Court ultimately determines that thereal properties in question cannot be considered assets of thebankruptcy estate, based on the trust relationship between theDiocese and each Parish.

Until the time as a final decision has been entered, "harm" willnot yet have been suffered, and the statute of limitations willnot yet have begun to run, Mr. Elsaesser points out.

The Diocese of Spokane and the Parishes share the position that atrust exists, with Spokane acting as a trustee. Mr. Elsaessernotes that District Court Judge Quackenbush in a ruling in theDistrict Court case CV-05-00274-JLQ, on June 15, 2006, held that aresulting trust can exist, with the Parishes as beneficiaries andthe Diocese, or Bishop, as trustee. Hence, the Diocese, astrustee, owes fiduciary duties to the Parishes as beneficiaries.

Mr. Elsaesser also contends that Spokane's bankruptcy filingconstitutes a breach of a fiduciary duty, if, by filing theDiocese, as trustee, took an unjustified risk with the property towhich the Parishes hold the beneficial interest, and this risk wasin furtherance of the Diocese's interest, not each Parish.

CG MULTIFAMILY: Has Until July 12 to File Schedules and Statement-----------------------------------------------------------------The U.S. Bankruptcy Court for the Eastern District of Louisianagave CG Multifamily-New Orleans, L.P., until July 12, 2006, tofile its schedules of assets and liabilities and statement offinancial affairs.

The Debtor tells the Court that due to the complexity of itsoperations as well as its limited manpower, it will be unable tofile its schedules and statement within the time required by theFederal Rule of Bankruptcy Procedure 1007(c).

Additionally, the Debtor states that pressing budgetary and cashcollateral issues need to be dealt with on an expedited basis,thus constraining its ability to complete the schedules andstatement on time.

Headquartered in Charleston, South Carolina, CG Multifamily-NewOrleans, L.P. owns the Saulet Apartments in New Orleans,Louisiana. The company filed for chapter 11 protection onJune 12, 2006 (Bankr. E.D. La. Case No. 06-10533). John M.Landis, Esq. and Michael Q. Walshe, Jr., Esq., at Stone PigmanWalther Wittman, LLC, represents the Debtors in its restructuringefforts. No Official Committee of Unsecured Creditors has beenappointed in the Debtor's bankruptcy proceedings. When the Debtorfiled for protection from its creditors, it estimated assets anddebts between $50 million and $100 million.

CHATTEM INC: Commences Sr. Sub. Note Holder Consent Solicitation----------------------------------------------------------------Chattem, Inc., has commenced the solicitation of consents from theholders of its $107.5 million 7% Senior Subordinated Notes due2014 for an amendment to the related indenture to increase theCompany's capacity to make restricted payments by an additional$85 million, including payments for the repurchase of theCompany's common stock. The record date for the solicitation isJune 23, 2006.

The consent solicitation is conditioned on the receipt of consentsfrom holders of at least a majority in aggregate principal amountof the notes, and other customary conditions. The consentsolicitation will expire at 5:00 p.m., Eastern Time, on July 14,2006, unless extended. The Company is offering to pay all holdersof notes on the record date that consent on or prior to theExpiration Time a fee of $15.00 per $1,000 in principal amount ofsuch holders' notes, payable in cash. The Solicitation Agent isWachovia Securities.

In connection with the consent solicitation, the Company's Boardof Directors has authorized the repurchase of up to an additional$100 million of the Company's common stock, under the terms of theCompany's existing stock repurchase program.

Under the program, the Company may, from time to time, purchaseshares of its common stock based on a number of factors, includingmarket conditions, the market price of the common stock, anti-dilutive effect on earnings, available cash and other factors asthe Company deems appropriate, subject to the limitations underthe indenture, the Company's credit agreement and applicableregulatory requirements. Beginning March 1, 2006 until June 26,2006, the Company repurchased 524,500 shares of its common stockat an average cost of $ 33.08 per share, or $17.3 million in theaggregate.

Chattem expects that any costs and expenses incurred to obtain theconsents in the consent solicitation will be amortized over theremaining maturity of its Senior Subordinated Notes.

Global Bondholder Services Corporation is serving as InformationAgent in connection with the consent solicitation. Requests fromnote holders for assistance in delivering consents or foradditional copies of the Consent Solicitation Statement should bedirected to the Information Agent at:

As reported in the Troubled Company Reporter on July 3, 2006,Standard & Poor's Ratings Services revised its outlook on ChattemInc. to stable from positive. At the same time, Standard & Poor'saffirmed all of Chattem's ratings, including its 'BB-' corporatecredit rating. Approximately $151 million of debt is affected bythis action.

CINRAM INT'L: Isidore Philosophem Steps Down as CEO---------------------------------------------------Isidore Philosophe, Cinram International Income Fund's founder andChief Executive Officer, has tendered his resignation as CEO ofthe Company and as a member of the Board of Directors, effectiveJune 30, 2006.

In his letter to the Board, Mr. Philosophe said, "After 50 yearsof hard work and dedication, I have decided, at age 68, that it istime for me to step down and devote more time to my family. I amextremely proud of what we have accomplished at Cinram and havevery mixed feelings about my decision, but I know that I amleaving the company on a very solid footing for future growth,with a dynamic team of managers and employees. I wish to offer myspecial thanks to our customers, investors, directors andespecially our employees, for their loyalty and support during theyears."

The Board of Directors of Cinram accepted Mr. Philosophe'sresignation and has appointed David Rubenstein, currentlyPresident and Chief Operating Officer, as its Chief ExecutiveOfficer, effective July 1, 2006.

As reported in the Troubled Company Reporter on May 11, 2006,Standard & Poor's Ratings Services lowered its corporate creditrating on prerecorded multimedia manufacturer Cinram InternationalInc. to 'BB-' from 'BB' following the company's announcement thatit had successfully converted into an income trust. The ratingswere removed from CreditWatch with negative implications, wherethey were placed March 3, 2006.

As reported in the Troubled Company Reporter on April 13, 2006,Moody's Investors Service downgraded Cinram International Inc.'sCorporate Family Rating and existing Senior Secured debt ratingsto B1 from Ba3 and assigned provisional ratings of (P) B1 to thecompany's proposed Senior Secured bank facilities. The outlook isstable. The downgrade reflected the company's plans torecapitalize itself as an income trust, which will result inessentially all of Cinram's future free cash flow being paid outto shareholders without any upfront reduction in leverage.

COMMUNICATIONS CORP: Has Until July 20 To File Schedules--------------------------------------------------------The Honorable Gerald H. Schiff of the U.S. Bankruptcy Court forthe Western District of Louisiana extended, until July 20, 2007,the deadline within which Communications Corporation of America,White Knight Holdings, Inc., and their respective debtor-affiliates, may file their schedules of assets and liabilities andstatement of financial affairs.

The Debtors tell the Court that due to the complexity anddiversity of their operations and their limited manpower, theyanticipate that they will be unable to complete their Schedulesand Statements within the period required under Bankruptcy Rule1007(c).

The Debtors contend that to prepare their required Schedules andStatements, they have to compile information from books, records,and documents relating to a multitude of transactions. Thecollection of the necessary information will require heavyexpenditure of time and effort on their part and their employees,the Debtor explained.

About White Knight

Headquartered in Lafayette, Louisiana, White Knight Holdings,Inc., is a media, television and broadcasting company.

When the Debtors filed for protection from their creditor, theyestimated less than $50,000 in assets and estimated debts between$100,000 and $500,000.

About Communications Corp. of America

Headquartered in Lafayette, Louisiana, Communications Corporationof America, is a media and broadcasting company. Along with mediacompany White Knight Holdings, Inc., it owns and operates around23 TV stations in Indiana, Texas and Louisiana. CommunicationsCorporation and 10 of its affiliates filed for bankruptcyprotection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410through 06-50421). Douglas S. Draper, Esq., William H. PatrickIII, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden,Patrick & Horn, LLC, represents Communications Corporation and itsdebtor-affiliates. When Communications Corporation and itsdebtor-affiliates filed for protection from their creditors, theyestimated assets and debts of more than $100 million.

COMMUNICATIONS CORP: Hires Fletcher Heald as Special Counsel------------------------------------------------------------Communications Corporation of America and its debtor affiliatesobtained authority from the U.S. Bankruptcy Court for the WesternDistrict of Louisiana to employ Fletcher, Heald & Hildreth,P.L.C., as their special counsel.

Fletcher Heald is expected to:

a. advise and represent the Debtors with respect to all aspects of matters before the Federal Communications Commission, including but not limited to the filing of all required applications and reports;

b. advise and represent the Debtors with respect to related matters as they arise at the Debtors' request; and

c. assist the Debtors' bankruptcy counsel from time to time.

Vincent J. Curtis, Esq., a member at Fletcher Heald, tells theCourt that he will bill $350 per hour for this engagement. Mr.Curtis discloses that Anne Crump, Esq., a Senior Counsel, bills$275 per hour and Alicia Staples, a paralegal, bills $160 perhour.

Mr. Curtis assures the Court that his firm is disinterested asthat term is defined in Section 101(14) of the Bankruptcy Code.

About Communications Corp. of America

Headquartered in Lafayette, Louisiana, Communications Corporationof America, is a media and broadcasting company. Along with mediacompany White Knight Holdings, Inc., it owns and operates around23 TV stations in Indiana, Texas and Louisiana. CommunicationsCorporation and 10 of its affiliates filed for bankruptcyprotection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410through 06-50421). Douglas S. Draper, Esq., William H. PatrickIII, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden,Patrick & Horn, LLC, represents Communications Corporation and itsdebtor-affiliates. When Communications Corporation and itsdebtor-affiliates filed for protection from their creditors, theyestimated assets and debts of more than $100 million.

COMMUNICATIONS CORP: White Knight Hires Pillsbury as Counsel------------------------------------------------------------White Knight Holdings, Inc., and its debtor affiliates obtainedauthority from the U.S. Bankruptcy Court for the Western Districtof Louisiana to employ Pillsbury Winthrop Shaw Pittman, LLP, astheir special counsel.

Pillsbury Winthrop is expected to:

a. advise and represent the Debtors with respect to all aspects of matters before the Federal Communications Commission, including but not limited to the filing of all required applications and reports;

b. advise and represent the Debtors with respect to related matters as they arise at the Debtors' request; and

c. assist the Debtors' bankruptcy counsel from time to time.

Kathryn Schmeltzer, Esq., a partner at Pillsbury Winthrop, tellsthe Court that she will bill $475 per hour for this engagement.Ms. Schmeltzer discloses that other professionals of the firm whowill render services bill:

When the Debtors filed for protection from their creditor, theyestimated less than $50,000 in assets and estimated debts between$100,000 and $500,000.

About Communications Corp. of America

Headquartered in Lafayette, Louisiana, Communications Corporationof America, is a media and broadcasting company. Along with mediacompany White Knight Holdings, Inc., it owns and operates around23 TV stations in Indiana, Texas and Louisiana. CommunicationsCorporation and 10 of its affiliates filed for bankruptcyprotection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410through 06-50421). Douglas S. Draper, Esq., William H. PatrickIII, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden,Patrick & Horn, LLC, represents Communications Corporation and itsdebtor-affiliates. When Communications Corporation and itsdebtor-affiliates filed for protection from their creditors, theyestimated assets and debts of more than $100 million.

CONTINENTAL GROUP: Moody's Rates Proposed $160 Million Loan at B3-----------------------------------------------------------------Moody's assigned first-time ratings to The Continental Group.With a stable outlook, Moody's assigned a B3 Corporate FamilyRating to Continental and a B3 rating to its proposed$160 million senior secured bank credit facilities, comprisedof a five-year $30 million revolving credit facility and a five-year $130 million Term Loan B. With $90 million in equity fromEdgeStone Capital Partners Inc., the financings will be used tofund a special dividend of $175 million to Continental's currentshareholders, repay $35 million of existing debt, and to paytransaction fees and expenses.

The B3 ratings are restrained by Continental's small size andlimited diversification; its exposure to volatile steel prices;the need to establish performance credentials as a highlyleveraged company operating in a fragmented, cyclical, and workingcapital intensive business; its small base of fixed assets, withtangible assets of $123 million not fully covering funded debtlevels; and initial pro forma negative tangible net worth.

While pro forma leverage as measured by debt-to-EBITDA is onlyabout 2.6 times as of June 30, 2006 and is expected to trend downto closer to 2 times over the next year reflecting strong near-term financial performance, Moody's believes that Continental'sbalance sheet is highly leveraged due to the size of the payout tocurrent shareholders. Moody's recognizes that the potential forfurther dividends is mitigated by restrictive terms in the bankcredit facilities.

The B3 ratings are supported by Continental's long operatinghistory; its market position and established long-term customerand supplier relationships; its focus on value-added products andservices as opposed to commodity-based products, which havesupported relatively good margins and returns; and a supportivenear-term environment for oilfield service activity.

The stable rating outlook reflects expected continued strength inContinental's financial performance over the near-term as a resultof favorable industry conditions. Building up tangible assets toa level that sufficiently covers funded debt through a combinationof debt reduction and retained earnings could be positive for theratings.

The bank credit facilities are not notched above the CorporateFamily Rating because secured debt represents the only debt in thecompany's capital structure. The facilities are secured byperfected liens on all the assets of the company, including allcurrent and future direct subsidiaries, a pledge of stock ofdomestic and foreign subsidiaries. The term loan, which hasminimal amortization until maturity, is expected to have a cashsweep mechanism that would require 50% of excess cash flow to beapplied toward debt reduction, and sets mandatory prepayments withproceeds from capital markets financings and asset sales.Financial covenants under the bank credit facilities are expectedto include a leverage ratio, interest coverage ratio, and fixedcharge coverage ratio.

The ratings on the bank credit facilities is subject to Moody'sreview of final documentation.

DANA CORP: Assumes Full Ownership of Mexican Biz for $19.5 Mil.---------------------------------------------------------------Dana Corporation and Desc S.A. de C.V. completed the dissolutionof their Mexican joint venture. The closing of this transactionprovides Dana with full ownership of several core operations basedin Mexico, which will operate under Dana Holdings Mexico, S. deR.L. de C.V., a new Dana subsidiary.

Dana and Desc dissolved their joint venture, Spicer S.A. de C.V.,with Dana assuming 100% ownership of operations that manufactureand assemble axles, driveshafts, gears, forgings, and castings inwhich Dana previously held an indirect 49% interest. Desc, inturn, assumed full ownership of the transmission and aftermarketgasket operations in which it previously held a 51% interest.Along with exchanging its minority interest in the joint venture,Dana also made cash payment of $19.5 million to Desc.

"Taking full ownership of these core operations further solidifiesour competitive profile," said Dana Chairman and CEO Mike Burns."In particular, Dana expects to benefit from the addition oftechnologically advanced operations supporting our core axle anddriveshaft businesses, as well as the manufacturing costefficiencies that come with expanding our global presence in thiskey competitive location."

With the completed transaction, Dana has acquired full ownershipof five manufacturing operations, which had combined sales -- bothto Dana and to third parties -- of $296 million in 2005.

The facilities, Autometales, S.A. de C.V.; and Ejes Tractivos,S.A. de C.V. in Mexico City, and Cardanes, S.A. de C.V.; EngranesConicos, S.A. de C.V.; and Forjas Spicer, S.A. de C.V. inQueretaro, produce light vehicle axle and driveshafts and avariety of related components.

As part of the transaction, Desc assumed full ownership ofTransmisiones y Equipos Mecanicos, S.A. de C.V. and TransmisionesTSP, S.A. de C.V. transmissions, located in Queretaro, Mexico;Transmission Technologies Corporation with operations inKnoxville, Tennessee; and the T.F. Victor, S.A. de C.V.aftermarket gasket operation in Mexico City. Dana will sellaftermarket gaskets in Mexico through T.F. Victor and originalequipment gaskets directly to engine and vehicle manufacturers.

In conjunction with Diamond's high financial leverage, the ratingand negative outlook anticipate deteriorating credit metrics,including modest interest coverage, weakened free cash flow, andthe potential for tightened liquidity given the weakeningoperating metrics. Moody's also stated that its ratings forDiamond will subsequently be withdrawn due to the lack of adequatefinancial information upon which to maintain a rating opinion.

These ratings were lowered:

* Corporate Family rating to Caa1 from B3

* Diamond's $60 million of remaining 9.25% senior unsecured notes due April 2008, to Caa2 from Caa1;

The rating downgrade reflects the high degree of excess capacitywithin the automotive glass replacement and repair industry, whichhas resulted in a significant degree of price compression anddiscounting. Further restricting sales growth has been the pastwinter's mild weather conditions. Diamond's revenue is expectedto continue to be under pressure in the near term. Based on thiscurrent weakening earnings environment, Moody's believes that theabove factors will lead to worsening credit metrics, lower freecash flow, and lower liquidity.

Diamond is currently under investigation for certain of itspractices and has not yet delivered its audited fiscal 2005financial statements. The company has indicated that it iscooperating with the investigation, but the ultimate cost ofresolving all aspects of this investigation are uncertain.

Diamond's Caa1 Corporate Family rating is consistent withcharacteristics which are incorporated into Moody's automotivesupplier methodology. The company's financial ratios generallypoint to Caa metrics including leverage, interest coverage, andfree cash flow generation. Further limiting Diamond's ratings areits small relative revenue base, focus on one core segment,regional focus within the U.S., and, as of the company's lastpublic filing, its large amount of debt maturities due within oneyear.

Moody's also stated that on Oct. 11, 2005 the company announcedthat it received requisite consents from holders of its seniornotes which eliminated the requirement to file annual, quarterlyand current reports with the Securities and Exchange Commission.While certain financial information has been available since thatfiling, Moody's believes that it lacks sufficient financialinformation to maintain a rating going forward. Consistent withMoody's policies, the ratings will be withdrawn.

Diamond Triumph Auto Glass, headquartered in Kingston,Pennsylvania, is a provider of automotive glass replacement andrepair services. The company operates a network of approximately240 automotive glass service centers, 1,000 mobile installationvehicles and three distribution centers in 43 states. Diamondbelieves it has one of the lowest cost structures in the industrydue to its focus on automotive glass replacement and repair.Annual revenues approximate $218 million.

According to the terms of the agreement, Merrill Lynch will payEnron $29.5 million. The settlement further provides thatapproximately $73.7 million in claims against the Enron Estatewill be subordinated and receive no distribution from the EnronEstate and approximately $10 million in transferred claims will beallowed. The settlement reflects that Merrill Lynch was involvedin fewer transactions with Enron than certain of the otherMegaClaim defendants. Merrill Lynch did not admit liability orwrongdoing and both parties agreed to settle the litigation toavoid the costs and uncertainties of further proceedings.

"This settlement is a further proactive step in our efforts tosettle the Enron Estate," John J. Ray III, Enron's President andBoard Chairman, said. "We are gratified with the progress we havemade to bring the MegaClaims litigation with Merrill Lynch to aclose and remain optimistic that the remaining financialinstitutions will put their Enron issues to rest."

ENTERGY NEW ORLEANS: City Council Wants to Quash Deposition-----------------------------------------------------------The Council of the City of New Orleans asks the U.S. BankruptcyCourt for the Eastern District of Louisiana to:

(1) quash the deposition notice and order that the deposition not take place; or in the alternative

(2) enter a protective order directing the Plaintiffs' counsel, Steffes Vingiello, under the penalty of the Court's contempt, not to inquire during their deposition into any communication or information that is privileged under:

The Reverend C.S. Gordon, Jr., et al., and Thomas P. Lowenburg, etal., had served the City Council with a notice seeking itsdeposition in connection with the Council's opposition to thecertification of their proofs and adversary proceeding as a classaction.

The Plaintiffs assert that they are representatives of a class ofall New Orleans ratepayers who are customers of Entergy NewOrleans Inc., and who were unlawfully and wrongfully overchargedfor electric services by the Debtor. Various parties, includingthe City Council, have opposed the Plaintiffs' request for class-action certification in regard to their claims.

In anticipation of the hearing on the Plaintiffs' request, theCourt has permitted the taking of appropriate discovery.

On June 2, 2006, the Plaintiffs served the City Council with thenotice scheduling a deposition under Rule 30(b)(6) of the FederalRules of Civil Procedure of the Council to be held at the officeof the Plaintiffs' counsel, Steffes, Vingiello & McKenzie, LLC.

The Claimants identified five areas on which they seek discoveryfrom the City Council:

(1) the Council's opposition and objections to the certification of classes;

(2) the factual grounds for the Council's assertion that ratepayers of ENOI do not meet the requirements for class certification;

(3) the factual grounds for any assertion by the Council that it adequately represents the interests of ENOI's ratepayers;

(4) the factual grounds for the Council's assertion that it has standing to oppose the certification; and

(5) any and all actions claimed to have been undertaken or planned to be undertaken by the Council to protect and promote the interests of ENOI's ratepayers in its bankruptcy proceeding.

In 1999, the Gordon Plaintiffs filed cases with the City Council,which is ENOI's regulator. The Gordon Plaintiffs challenged underratemaking principles, the legality of ENOI's recouping of certaincosts through its fuel-adjustment clause as opposed to its baserates. In 2004, the Council issued a resolution ordering ENOI torefund ratepayers for $11,310,072, which was paid by ENOI prior tothe commencement of its Chapter 11 case.

The Council refused to award any refunds and on appeal, the CivilCourt affirmed the Council's judgment. The case, through whichthe Gordon Plaintiffs seek an additional $57,500,000 in refunds,and which was allowed to proceed pursuant to the BankruptcyCourt's order and the agreement of all the parties, is pendingbefore the Louisiana Fourth Circuit Court of Appeal where briefsare still being filed.

In 2000, the Lowenburg Plaintiffs filed a petition before theCity Council challenging the legality of awarding ENOI rates ofreturn above a 7-1/2% rate to which the Plaintiffs allege ENOI islimited under a 1922 ordinance. The Lowenburg Plaintiffs soughtrefunds from ENOI of up to $823,000,000. The Council issued aresolution and order denying the claims on April 20, 2006.

Pursuant to the Bankruptcy Court's order and the agreement ofcertain parties-in-interest, the Lowenburg case has been permittedto proceed on appeal in the state courts.

Representing the City Council, Gayle P. Ehrlich, Esq., atSullivan & Worcester LLP, in Boston, Massachusetts, argues thatthe Plaintiffs are not entitled to depose the Council because ithas exclusive jurisdiction over the regulation of the Debtor andthe sole authority to represent the interests of the New Orleansratepayers. She asserts taht the jurisdiction of the BankruptcyCourt does not stretch to allow for review of the acts of theCouncil, making the notice of Entergy New Orleans Inc.unenforceable and null and void.

Ms. Ehrlich adds that the City Council has legislative immunity asprovided for in the Louisiana State Constitution, which covers notonly actual state legislators and Council members, but also theirassistants and other representatives, as long as these thoseindividuals exercise discretionary functions that fall within thelegitimate sphere of legislative-related activities. TheCouncil's undeniable legislative immunity includes immunity fromhaving to appear at a deposition or to respond to questions,directly or through representatives, concerning matters within theCouncil's legitimate legislative authority.

Deposition of the Court is also inappropriate under thedeliberative-process privilege, which shields opinions,recommendations and deliberations comprising part of a process bywhich governmental decisions are formulated, Ms. Ehrlich asserts.She maintains that, in seeking to depose the Council, thePlaintiffs will undoubtedly ask questions that will touch uponpre-decisional and deliberative communications that are otherwiseprotected against disclosure by the deliberative-processprivilege.

The City Council is protected by the attorney-client privilege,which is recognized in Louisiana and protects governmental bodies,Ms. Ehrlich further argues.

Moreover, according to Ms. Ehrlich, the matters sought by thePlaintiffs in deposing the Council is protected under the work-product doctrine, which protects legal work done in anticipationof litigation as well as the mental processes of an attorney inhis or her representation of the client. The work-productdoctrine, which covers governmental entities, including theCouncil and their lawyers, protects against the disclosure ofprivileged information whether the request for the disclosure ismade to an attorney or directly to a client.

Furthermore, the request for deposition of the Council is part ofa harassment strategy by Plaintiffs because this is not the firsttime they have sought to depose a representative of the Council,Ms. Ehrlich relates. She explains that in the Lowenburg case, theLowenburg Plaintiffs sought to depose certain attorneys, acting asCouncil advisors, on the excuse that the Lowenburg Plaintiffsneeded to develop their factual basis for an unfounded conflict-of-interest claim, a claim later rejected by the Council and overwhich the Claimants later lost on appeal in each of the threelevels of the Louisiana-court system.

Plaintiffs Respond

The actions of the Council with regards to its opposition to thecertification of classes and the Gordon and Lowenburg proceedingsare administrative actions, which unlike legislative actions arenot subject to immunity or privilege, asserts William E. Steffes,Esq., at Steffes, Vingiello & McKenzie, LLC, in Baton Rouge,Louisiana.

The participation of the City Council in the status conferenceregarding the Class Certification Motion and in the discovery wasspecifically focused on the Claims, not general policy,Mr. Steffes points out.

When the City Council filed its objection, it became a party-in-interest in the Debtor's bankruptcy case, subject to both thejurisdiction of the Bankruptcy Court and discovery, Mr. Steffesargues.

Mr. Steffes also notes that, it has been recognized since theearliest days of regulation that a regulatory body acts indifferent capacities depending upon the nature of the specificproceedings before it. When a regulator sets the rates of autility on a prospective basis, it is acting in a legislative orquasi-legislative capacity. But when a petitioner seeks refundsor reparation because the utility has violated the tariffpreviously approved by the regulator, the regulator acts as anadjudicator, takes evidence and acts as the arbiter between theprivate parties.

The mere fact that the City Council sits as a legislative bodydoes not mean that all proceedings before it are legislative innature, Mr. Steffes asserts.

Mr. Steffes argues that the Gordon and Lowenburg proceedings wereadjudicative in nature. He notes that in the proceedings, thePlaintiffs did not seek the enactment of new laws, but soughtdetermination of ENOI's liability on present or past facts andunder existing laws. To render a decision, the Council determinedadjudicative facts and was required to conduct evidentiaryhearings and take evidence.

Consequently, the Plaintiffs ask the Court to dismiss the CityCouncil's request to quash the Deposition Notice.

About Entergy New Orleans

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.-- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provideselectric and natural gas service to approximately 190,000 electricand 147,000 gas customers within the city of New Orleans. EntergyNew Orleans is the smallest of Entergy Corporation's five utilitycompanies and represents about 7% of the consolidated revenues and3% of its consolidated earnings in 2004. Neither EntergyCorporation nor any of Entergy's other utility and non-utilitysubsidiaries were included in Entergy New Orleans' bankruptcyfiling. Entergy New Orleans filed for chapter 11 protection onSept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,Waechter, Poitevent, Carrere & Denegre, L.L.P., represent theDebtor in its restructuring efforts. When the Debtor filed forprotection from its creditors, it listed total assets of$703,197,000 and total debts of $610,421,000. (Entergy NewOrleans Bankruptcy News, Issue No. 19; Bankruptcy Creditors'Service, Inc., 215/945-7000)

ENTERGY NEW ORLEANS: Seeks Summary Judgment on Plaintiffs' Claims-----------------------------------------------------------------Entergy New Orleans, Inc., Entergy Corporation, Entergy Services,Inc., and System Fuels, Inc., ask the U.S. Bankruptcy Court forthe Eastern District of Louisiana to enter a summary judgmentdenying class certification to the Gordon and Lowenburg Plaintiffsand their proofs of claim, to the extent the claims are based uponalleged claims of purported class members.

The Gordon Plaintiffs and Lowenburg Plaintiffs have filed ClaimNos. 328 and 329 for $240,000,000 and $82,796,573 in connectionwith their allegations against ENOI in the Civil District Courtfor the Parish of New Orleans, Louisiana, and the Council for theCity of New Orleans.

The Gordon Plaintiffs -- The Reverend C. S. Gordon, Jr., on behalfof New Zion Baptist Church; J. Michael Malec; Darryl Malek-Wiley;Willie Webb, Jr.; and Maison St. Charles, L.L.C., d/b/a QualityInn Maison St. Charles -- filed two actions, one with the Councilof the City of New Orleans, and another in the Civil DistrictCourt for the Parish of Orleans, against Entergy New Orleans,Inc., and other Entergy entities.

The Lowenburg Plaintiffs -- Thomas P. Lowenburg, Martin Adamo,Vern K. Baxter, Philip D. Carter, Bernard Gordon, Leonard Levine,Ivory S. Madison, Donetta Dunn Miller, and Maison St. Charles,L.L.C. d/b/a Quality Inn Maison St. Charles -- also filed a classaction against ENOI and the Council for the City of New Orleans,seeking various remedies for ENOI's overcharges in base ratesbilled to ratepayers since 1975 in violation of the allowable 2%rate of return on rate base established in 1922 by the CommissionCouncil of the City of New Orleans.

As reported in the Troubled Company Repoter on May 5, 2006, theGordon and Lowenburg Plaintiffs jointly asked the Court to:

(a) certify the classes of ENOI's customers who have claims for declaratory and injunctive relief, for restitution of ascertainable losses of money, including refund of overcharges, and damages as the result of payments of overcharges for electricity sold by, or electric service provided by, provided by ENOI; and

(b) designate representatives of the classes, appoint counsel to represent the classes, and authorize appropriate notice to be provided to the class members.

Pursuant to Rule 23(a) of the Federal Rule of Civil Procedure,putative class representatives are required to show that the classis so numerous that joinder of all members is impracticable, thatthere are questions of law or fact common to the class, that theclaims or defenses of the representative parties are typical ofthe claims or defenses of the class and that the representativeparties will fairly protect the interests of the class.

Besides claiming that they satisfy the Rule 23(a) requirements forcertification, the Plaintiffs contend that their Claims should bemaintained as a class action under Rule 23(b)(3).

Under Rule 23(b)(3), the Plaintiffs must show that the questionsof law common to the members of the class predominate over anyquestions affecting only individual members and that a classaction is superior to other available methods for the fairadjudication of any controversy.

The Plaintiffs assert that they satisfy Rule 23(b)(3) becausethousands of claims based upon overcharging of the ratepayers areunmanageable and the claims administration process for the classmembers' claims can be handled in an efficient manner that is farsuperior to any alternatives.

The Entergy Entities assert, however, that the Plaintiffs'putative class claims can be resolved by an administrative bodywith expertise over the claims or can be resolved through thebankruptcy claims process.

The Entergy Entities argue that a class action is not superior toother available methods for adjudicating the dispute as the claimsat issue can be resolved by a regulatory or administrative body.

In addition, as the Louisiana Supreme Court has noted in State exrel. Guste V. Council of City of New Orleans, 309 So. 2d 290, 294(La. 1975), the Council is "vested with the sole legal authorityto regulate the rates charged by companies furnishing utilityservices in the City of New Orleans." The Council's exclusivejurisdiction over ENOI's retail rates and changes encompassesregulation of the precise conduct that the Gordon Plaintiffscomplain about, Ms. Eitel contends.

Ms. Eitel also points out that the Gordon Plaintiffs do not havevalid anti-trust or other claims beyond the FERC and the Council'sexclusive jurisdiction. She notes that the Gordon Plaintiffs havenot explained how they suffered any damages other than allegedovercharges, and the nature or extend of any other "damages".

Because exclusive original jurisdiction over the Plaintiffs'claims lie with the FERC and the City Council, the administrativeproceedings before the FERC and the Council are superior to aclass action to resolve the Gordon Plaintiffs' claims.

The Entergy Entities also assert that the exclusive jurisdictionover the Lowenburg Plaintiffs' claims lies with the City Council.

Thus, regulatory proceedings before the City Council andsubsequent appeals that may be filed are superior to a classaction to resolve the Lowenburg Plaintiffs' claims, Ms. Eitelargues. She adds that a regulatory proceeding before the Councilis superior to a class action because it is the only partyauthorized to pursue any claims of alleged overcharges on behalfof ENOI customers.

Additionally, the Debtor's pending bankruptcy claims process issuperior to a class action in resolving the Plaintiffs' claims,Ms. Eitel argues. She says that, because bankruptcy proceduralrules are designed to handle large numbers of claims, thebankruptcy court has complete control over the bankruptcy estateand the mandatory joinder of all claims against a debtor.

The Plaintiffs argued that the Court's May 25, 2006 schedulingorder adopts the Court's "short-form pre-trial order" for mattersrelating to the Plaintiffs' Class Certification Motion, which isset for evidentiary hearing on July 31 and August 1, 2006.

The short-form pre-trial order requires that "all dispositivemotions [will] be filed and served in sufficient time to permithearing, and counsel will set the motion so as to be heard nolater than 30 days before the trial." The Entergy Entities filedtheir Summary Judgment Motions on June 22, 2006, and sought ahearing on the Motions on July 12.

The Plaintiffs also argued that their counsel will be involved inthe final preparation for the trial on their Class CertificationMotion, not only in preparing the witnesses, but also preparingthe exhibits, trial memoranda and bench books.

The Entergy Parties responded that having a hearing on theSummary Judgment Motions on July 12 is the most economical andefficient way to proceed, and will not prejudice the Plaintiffs.Ms. Eitel argued that the Motions, if granted, would obviate theneed for the trial on July 30 and August 1.

Judge Brown will convene a hearing on the Motions for SummaryJudgment on July 13, 2006, at 2 p.m.

The Plaintiffs are granted an extension to file their oppositionsto the Motions for Summary Judgment until noon today.

About Entergy New Orleans

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.-- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provideselectric and natural gas service to approximately 190,000 electricand 147,000 gas customers within the city of New Orleans. EntergyNew Orleans is the smallest of Entergy Corporation's five utilitycompanies and represents about 7% of the consolidated revenues and3% of its consolidated earnings in 2004. Neither EntergyCorporation nor any of Entergy's other utility and non-utilitysubsidiaries were included in Entergy New Orleans' bankruptcyfiling. Entergy New Orleans filed for chapter 11 protection onSept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,Waechter, Poitevent, Carrere & Denegre, L.L.P., represent theDebtor in its restructuring efforts. When the Debtor filed forprotection from its creditors, it listed total assets of$703,197,000 and total debts of $610,421,000. (Entergy NewOrleans Bankruptcy News, Issue No. 19; Bankruptcy Creditors'Service, Inc., 215/945-7000)

ELIZABETH ARDEN: Buys Brand Portfolio from Riviera Concepts-----------------------------------------------------------Elizabeth Arden, Inc. acquired the brand licenses and certainassets of Riviera Concepts Inc. The acquired brands include theBadgley Mischka(R) fragrance, which is launching this fall inprestige department and specialty stores in the U.S. and Canada,the classic fragrances of Canadian designer Alfred Sung, includingSUNG Alfred Sung, SHI Alfred Sung and JEWEL Alfred Sung, theHUMMER(TM) Fragrance for Men, under a licensing agreement withGeneral Motors Corporation, as well as the designer fragrancebrands of Nanette Lepore and Cynthia Rowley, British accessorydesigner Lulu Guinness and American couturier Bob Mackie.

"We are pleased with the acquisition of these distinctivefragrance brands," E. Scott Beattie, Chairman and Chief ExecutiveOffice of Elizabeth Arden, Inc., commented. "Each will contributeto and complement our Elizabeth Arden fragrance portfolio.Riviera Concepts has done an exemplary job of developing thesebrands during their ownership; we will continue this momentum andfocus on building these brands on a more global basis throughincreased support and distribution."

"It has been a pleasure to work with Elizabeth Arden on thistransaction," Adrian Ellis, President of Riviera, stated. "Theyoffer a tremendous opportunity for these brands to grow. Eachbrand will benefit from their global infrastructure, sales,marketing, and distribution capabilities."

As reported in the Troubled Company Reporter on Feb. 22, 2005,Standard & Poor's Ratings Services revised its outlook on prestigebeauty products company Elizabeth Arden, Inc., to positive fromstable.

At the same time, Standard & Poor's affirmed its ratings on thecompany, including its 'B+' corporate credit rating.Approximately $225 million of rated debt is affected by thisaction.

ESCHELON TELECOM: Acquires Mountain Telecom For $40 Million Cash----------------------------------------------------------------Eschelon Telecom, Inc., signed a definitive agreement to acquireMountain Telecommunications, Inc. for approximately $40 million incash. The transaction is expected to close in the fourth quarterof 2006.

MTI, based in Tempe, Arizona, is Arizona's only locally owned andoperated telecommunications company. MTI provides services inPhoenix, Tucson and markets throughout the state of Arizona.

"This transaction combines the financial stability of Eschelonwith the strong presence of MTI throughout Arizona to enable thecompany to continue providing the highest level of service totheir customers while maintaining competitive prices," statedRichard A. Smith, President and Chief Executive Officer ofEschelon Telecom, Inc. "MTI fits our acquisition filters well asit has focused on the medium and small business segment, is in oneof our existing states and is EBITDA and cash flow positive.Those factors, combined with its significant presence in Arizona,are what attracted us to MTI. Before our acquisition of OregonTelecom, we established an objective of acquiring $100M ofcompetitive local exchange carrier revenue over a two to three-year period. With the acquisitions of Oregon Telecom and now MTI,we have acquired over $42 million in revenue -- we continue tomake progress toward our goal," said Mr. Smith.

Jack Pleiter, President and CEO of Mountain Telecommunications,Inc. stated, "We share many similarities with Eschelon, includinga mission to deliver superior products and service to ourcustomers. That focus will not change once we are part ofEschelon -- our customers will remain at the center of ourbusiness. The MTI team of Associates is proud of what we havebuilt and this transaction will be good for all of ourconstituents."

The Company says that the completion of the transaction willenhance its market leadership in the fast growing Phoenix marketand will expand its network footprint to Tucson and other highgrowth markets throughout the state of Arizona.

About Mountain Telecommunications

Headquartered in Tempe, Arizona, Mountain Telecommunications,Inc., is a locally owned, facilities-based Competitive LocalExchange Carrier serving business, government, and educationalorganizations throughout the State of Arizona.

About Eschelon Telecom

Headquartered in Minneapolis, Minnesota Eschelon Telecom, Inc.(NASDAQ: ESCH) -- http://www.eschelon.com/-- is a facilities- based competitive communications services provider of voice anddata services and business telephone systems in 19 markets in thewestern United States. The company offers small and medium-sizedbusinesses a comprehensive line of telecommunications and Internetproducts. Eschelon currently employs 1,118 telecommunications andInternet professionals, serves over 50,000 business customers andhas approximately 415,000 access lines in service throughout itsmarkets in Minnesota, Arizona, Utah, Washington, Oregon, Colorado,Nevada and California.

* * *

As reported in the Troubled Company Reporter on March 27, 2006,Standard & Poor's Rating Services assigned its 'B-' rating toEschelon Telecom's $46 million 8.375% senior second securednotes due 2010. The 'B-' corporate credit rating and stableoutlook on Eschelon were affirmed.

The Company's gross profits in 2006 increased to $2,111,390, anincrease of 62% over gross profits of $1,306,320 in 2005.

Consolidated net loss from operations for the three months endedMarch 31, 2006 increased to $539,811, less than 1% over $537,571in 2005.

Consolidated net loss attributable to common stockholders for thethree months ended March 31, 2006 was $1,930,251 compared to netloss of $1,288,246 a year ago. Included in the consolidated netloss attributable to common stockholders for the three monthsended March 31, 2006 are net non-cash expenses of approximately$1.4 Million from the increase in the valuation of derivativeliabilities at March 31, 2006, partially offset by gains recordedin the quarter.

Operating expenses for the three months ended March 31, 2006 were$2,651,201 compared to $1,843,890 for the three months ended March31, 2005. The increase in operating expenses is due to increasedsales commission expense on increased sales, as well as increasedsales and marketing expenses due to efforts to promote BIOPROTechnology and expand international operations.

Included in the Company's consolidated results for 2006 arerevenues and expenses from its three controlled subsidiaries:

During the three months ended March 31, 2006, 9% of total revenuescame from BIOPRO Australia, 1% from BIOPRO Asia and 9% from SRAMarketing.

At March 31, 2006, the Company's balance sheet showed $2,033,991in total assets and $4,358,990 in total liabilities, resulting ina stockholders' deficit of $2,324,999. The Company's March 31balance sheet also showed a working capital deficit with$1,276,533 in total current assets and $4,303,493 in total currentliabilities. The Company's March 31 balance sheet furtherrevealed an accumulated deficit of $10,392,211.

Commenting on the first quarter 2006 results, Ray W. Grimm,FemOne's chief executive officer states: "We are very pleased withhaving increased our revenues in the first quarter of 2006 by 54%over the first quarter in 2005. We are also showing our continuedmomentum to grow revenues quarterly by increasing our revenues byover 20% from the fourth quarter of 2005." "Our consolidated netloss, before the non-cash effects of the accounting treatment ofour convertible financings, is continuing to decrease and isapproximately 20% less than our net loss from operations for thefourth quarter of 2005, proving our ability to not only grow oursales, but reaching our goal of profitability in the near future."

A full-text copy of the Company's financial report for the quarterended March 31, 2006, is available for free at:

Peterson & Co., LLP, expressed substantial doubt about FemOne'sability to continue as a going concern after it audtied theCompany's financial statements for the year ended December 31,2005. The auditing firm pointed to the COmpany's recurring lossesfrom operations and working capital deficit.

About FemOne Inc

Based in Carlsbad, California, FemOne, Inc. (OTCBB: FEMO) -- http://www.femone.com/-- is a sales and marketing company with distribution in the United States, Canada, Australia, New Zealand,the Philippines and South Africa.

FIRST FIN'L: Balance Sheet Upside Down by $3 Million at March 31----------------------------------------------------------------First Financial Corp., reported a $753,732 net loss on $1,034,424of revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $3,317,385in total assets and $6,391,531 in total liabilities resulting in$3,074,146 stockholders' deficit.

Pattillo, Brown & Hill, L.L.P., in Albuquerque, New Mexico,raised substantial doubt about First Financial's ability tocontinue as a going concern after auditing the Company'sconsolidated financial statements for the year endedDec. 31, 2005. The auditor pointed to the Company's lossesfrom its mortgage operations.

About First Financial

Headquartered in Terre Haute, Indiana, First Financial Corp.-- http://www.first-online.com-- through its subsidiaries, offers financial services in Indiana and Illinois. The company'slending portfolio comprises commercial, real estate and mortgageloans. It also offers trust account and insurance services.

FOAMEX INTERNATIONAL: Expanded A&M Retention Gets Court's Nod-------------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware grantedFoamex International Inc. and its debtor-affiliates permission toexpand the scope of services provided by Alvarez & Marsal BusinessConsulting LLC.

As reported in the Troubled Company Reporter on June 7, 2006, A&M,in addition to the original services provided, will:

(a) review and analyze a further revised business plan as well as analyze several operational alternatives with respect to the Debtors' carpet cushion business;

(b) facilitate the resolution of time sensitive issues with respect to the Debtors' information technology system and structure on a more in-depth basis than contemplated in the original engagement letter; and

(c) develop new initiatives that are central to the operational realization of the Debtors' revised business plan.

Aside from the reimbursement of all out-of-pocket expenses, theDebtors will pay A&M:

-- $125,000; and

-- $75,000 per month to provide continued support with respect to the Debtors' information technology system, at the Debtors' option.

The total fees to be paid to A&M pursuant to the Amendment willnot exceed $350,000, Pauline K. Morgan, Esq., at Young, Conaway,Stargatt & Taylor LLP, in Wilmington, Delaware, tells the Court.

FOAMEX INTERNATIONAL: Selling Hamblen Facility for $390,000-----------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware authorizedFoamex International Inc. and its debtor-affiliates to sell 7.27acres of real property and facility located in Hamblen County,Tennessee, for $390,000, to Don Bunch.

As reported in the Troubled Company Reporter on May 9, 2006, theFacility was formerly used as a manufacturing facility for theDebtors' carpet cushion business segment. In April 2005, theDebtors ceased operations at the Facility. Afterwards, theDebtors utilized the Facility for miscellaneous storage but nolonger utilized it for any operational purpose.

According to Pauline K. Morgan, Esq., at Young Conaway Stargatt &Taylor LLP, in Wilmington, Delaware, the Debtors do not anticipateany future need of the Facility.

The Debtors initially believed that leasing the Facility to anadjacent landowner or any other interested party may be a viablebusiness use. However, after further investigation, it wasdetermined that no party was interested in leasing the Facility,and the Facility's roof has fallen into disrepair.

Pursuant to a Sale Contract, Don Bunch will provide a $20,000deposit, which will be credited to the purchase price upon theclosing of the sale.

G+G RETAIL: Sells Remaining Assets to Max Rave for $300,000-----------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New Yorkallowed G+G Retail Inc. to sell certain personal property to MaxRave, LLC, for $300,000.

Early this year, Max Rave, and Guggenheim Corporate Funding LLC,won the auction of substantially all of the Debtor's assets for$35 million. GCF provided equity and loan commitments to Max Raveto:

* fund the purchase of the company, * provide fresh inventory for stores, and * provide operating working capital for operations.

The assets sold at the auction did not include the inventory ofnetwork servers and related equipment and certain computersoftware and software licenses that Max Rave wants to own.

Other key terms of the asset purchase agreement on the personalproperty include:

(a) the release and discharge of the Debtors from any further obligation to provide computer or information technology services to Max Rave under that Feb. 17, 2006, Transition Services Agreement;

(b) reasonable access for the Debtor to records, information and certain personnel until the closing of the Debtor's bankruptcy sale; and

(c) the Debtor to have the right to occupy and use certain areas at Max Rave's facility located at 8501 West Side, North Bergen, New Jersey.

Headquartered in New York, New York, G+G Retail Inc. retailsladies wear and operates 566 stores in the United States andPuerto Rico under the names Rave, Rave Girl and G+G. The Debtorfiled for Chapter 11 protection on Jan. 25, 2006 (Bankr.S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., LauraDavis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.represent the Debtor in its restructuring efforts. Scott L.Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C.,represents the Official Committee of Unsecured Creditors. Whenthe Debtor filed for protection from its creditors, it estimatedassets of more than $100 million and debts between $10 million to$50 million.

GENCORP INC: Completes Consent Solicitation for 9-1/2% Sr. Notes----------------------------------------------------------------GenCorp Inc. disclosed that pursuant to the terms of itspreviously announced consent solicitation with respect to aproposed amendment to the Indenture governing its 9 1/2% SeniorSubordinated Notes due 2013, it has received consents to theamendment representing greater than a majority in principal amountof the Notes outstanding as of the expiration of the consentsolicitation at 5:00 p.m., New York City time, on June 27, 2006.

As of the Expiration Time, consents had been received from$96.9 million in aggregate principal amount, or approximately 99%,of the outstanding Notes. GenCorp, its subsidiaries that areparty to the Indenture and the trustee under the Indenture haveentered into a Second Supplemental Indenture including theproposed amendment.

In addition, GenCorp reported that it has amended its seniorcredit agreement primarily to increase its letter of creditsubfacility from $44 million to $80 million to provide capacityfor additional letters of credit required by various environmentalagencies, and increase term loans to provide collateral for theApril 2007 maturity of $19.8 million outstanding under GenCorp's 53/4% Convertible Subordinated Notes.

Wachovia Securities is the Solicitation Agent for the consentsolicitation. Persons with questions regarding the consentsolicitation should contact:

GENERAL MOTORS: Board Allows CEO to Negotiate with Renault-Nissan-----------------------------------------------------------------General Motors Corp.'s Board of Directors endorsed, on July 7,2006, a recommendation by the company's senior management that itengage in exploratory discussions with Renault and Nissanregarding GM's potential participation in an alliance among thethree companies.

"The GM Board of Directors authorized management to proceed withits plan to consider ideas the other two companies have and toweigh the potential benefits of such an alliance in order toassist the Board in its decision making," said GM Director GeorgeFisher. "Management will keep the Board well informed and thedirectors, of course, will closely monitor the process to assurethat its outcome serves the best interests of all GM shareholders.The Board continues to fully support the company's North Americanturnaround strategy, and we encourage management to also continueits efforts to conclude a satisfactory resolution of the issuesassociated with the Delphi bankruptcy and to complete the pendingGMAC transaction."

The Board action was taken in response to a request made byTracinda Corporation, one of GM's larger shareholders, and toexpressions of interest made public by the respective boards ofRenault and Nissan.

GM Chairman Rick Wagoner will lead the company's effort to conductexploratory talks with the managements of Renault and Nissan.

"General Motors has a lot of experience with different types ofalliances, and some have provided significant benefits to GM'scompetitive position and financial strength," said Mr. Wagoner."We will enter into discussions with the managements of Renaultand Nissan with an open mind -- eager to hear their ideas of howan alliance between our companies might work to our mutualbenefit. Given the complexity of any potential relationship, ithas to be carefully considered on its merits before coming to anyconclusion. We are committed to an objective and thorough reviewof that potential."

Mr. Wagoner noted that when the idea of joining an alliance withRenault and Nissan was first suggested to him, he promptlycontacted Carlos Ghosn and the two leaders agreed to meet at amutually convenient time to have an initial exploratorydiscussion.

"We periodically receive interesting proposals and we owe it tothe company and its shareholders to explore how they might work,and to objectively weigh the potential benefits and issues thateach might present," Mr. Wagoner said. "That is exactly what werecommended to the GM Board in this specific case, and exactlywhat it has agreed we should do."

North American Turnaround Strategy

In the meantime, both Mr. Wagoner and Mr. Fisher noted that it iscrucial for General Motors to stay focused on implementing itsNorth American turnaround strategy.

"We announced this strategy about one year ago, and have madetremendous progress in implementing all the key initiatives," Mr.Wagoner said. "The positive results from these major actions arealready evident. We have some major items that we are working onright now that are important to our continued progress, includingthe Delphi restructuring and the GMAC transaction. So there'splenty more work to do to return our North American operations tosustained profitability. We remain focused on achieving this asquickly as possible."

As reported in the Troubled Company Reporter on June 30, 2006,Standard & Poor's Ratings Services held all its ratings on GeneralMotors Corp. -- including the 'B' corporate credit rating and the'B+' bank loan rating, but excluding the '1' recovery rating -- onCreditWatch with negative implications, where they were placedMarch 29, 2006.

As reported in the Troubled Company Reporter on June 22, 2006,Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' toGeneral Motor's new $4.48 billion senior secured bank facility.The 'RR1' is based on the collateral package and other protectionsthat are expected to provide full recovery in the event of abankruptcy filing.

GREENMAN TECH: AMEX Files Form 25 to Strike Common Stock Listing----------------------------------------------------------------The American Stock Exchange LLC(R) reported its finaldetermination to remove the common stock of GreenMan Technologies,Inc. from listing on the Exchange, and has filed an application onForm 25 to strike the Securities from listing with the Securitiesand Exchange Commission. The delisting will become effective onJuly 17, 2006 unless postponed by the SEC.

As reported in the Troubled Company Reporter on June 21, 2006, theAmerican Stock Exchange delisted GreenMan's common stock after theclose of trading on June 14, 2006. AMEX stated that it willproceed with filing an application with the SEC to strikeGreenMan's common stock from listing on the AMEX.

Pursuant to its rules, the Exchange provided notice to GreenManTechnologies, Inc. of the decision to delist the Securities and anopportunity to appeal the decision to a panel designated by theExchange's Board of Governors.

About GreenMan

Headquartered in Lynnfield, Massachusetts, GreenMan Technologies,Inc., markets scrap granular tires in the United States. Thecompany's products are used as a tire-derived fuel used by pulpand paper producers.

Going Concern Doubt

As reported in the Troubled Company Reporter on June 6, 2006, Wolf& Company, PC, in Boston, Massachusetts, raised substantialdoubt about GreenMan Technologies Inc.'s ability to continue as agoing concern after auditing the Company's consolidated financialstatements for the year ended Sept. 30, 2005. The auditor pointedto the Company's losses from operations and working capitaldeficiency of $8,667,886 at September 30, 2005.

GREGG APPLIANCES: March 31 Balance Sheet Upside Down by $5.1 Mil.-----------------------------------------------------------------Gregg Appliances, Inc., filed its financial results for the fiscalyear ended March 31, 2006, with the Securities and ExchangeCommission on June 26, 2006.

For the full year ended March 31, 2006, the Company earned$22.2 million of net income on $900.4 million of net revenues,compared to $29.2 million of net income earned on $803.2 millionof net revenues in 2005.

At March 31, 2006, the Company's balance sheet showed$283.7 million in total assets and $288.9 million in totalliabilities, resulting in a $5.1 million stockholders' deficit.

Headquartered in Indianapolis, Indiana, Gregg Appliances, Inc., -- http://www.hhgregg.com/-- is a specialty retailer of consumer electronics, home appliances and related services operating underthe name HH Gregg. The Company operates 58 stores in sixmidwestern and southeastern states with revenues of approximately$753 million for the fiscal year ended March 31, 2004.

* * *

As reported in the Troubled Company Reporter on Jan. 18, 2006,Moody's Investors Service assigned these ratings to GreggAppliances, Inc.:

GULF COAST: Court Approves $4.2 Million Asset Sale to Jered LLC---------------------------------------------------------------The U.S. Bankruptcy Court for the Northern District of Texasapproved the sale of substantially all of the assets of Gulf CoastHoldings, Inc., dba Unidynamics, Inc., to Jered LLC.

Official creditors' committees have the right to employ legal andaccounting professionals and financial advisors, at the Debtors'expense. They may investigate the Debtors' business and financialaffairs. Importantly, official committees serve as fiduciaries tothe general population of creditors they represent. Thosecommittees will also attempt to negotiate the terms of aconsensual chapter 11 plan -- almost always subject to the termsof strict confidentiality agreements with the Debtors and othercore parties-in-interest. If negotiations break down, theCommittee may ask the Bankruptcy Court to replace management withan independent trustee. If the Committee concludes reorganizationof the Debtors is impossible, the Committee will urge theBankruptcy Court to convert the chapter 11 cases to a liquidationproceeding.

As reported in the Troubled Company Reporter on May 31, 2006,as counsel, Winstead Sechrest will:

(a) advise and consult with the Committee concerning legal questions arising in the administration of the Debtor's estate and the unsecured creditors' rights and remedies in connection with the estate;

(b) assist the Committee in preserving and protecting the Debtor's estate;

(d) prepare and prosecute any pleadings, motions, answers, notices, orders and any reports that are required for the protection of the Committee's interest and the orderly administration of the Debtors' estate;

(e) advise the Committee regarding the negotiation and documentation of debt restructuring and related transactions or agreements;

(f) monitor transactions proposed by the Debtor during the course of its chapter 11 cases and advise the Committee;

(g) review the nature and validity of liens asserted against the Debtor's property and advise the Committee concerning the enforceability of those liens;

(h) review and monitor the Debtor's ongoing business, if any;

(i) advise the Committee in connection with any suggested or proposed plans of reorganization;

(j) counsel the Committee in connection with the formulation, negotiation, and promulgation of alternative plans of reorganization, if necessary or appropriate; and

(k) perform any and all of the legal services for the Committee.

Phillip L. Lamberson, Esq., a partner at the firm, told the Courtthat he charges $350 per hour for his services. He furtherdisclosed that his colleagues at the firm working for the Debtor'scase and their hourly rates are:

Mr. Lamberson assured the Court that his firm and itsprofessionals do not hold material interest adverse to theDebtor's estate and are disinterested as that term is defined inSection 101(14) of the Bankruptcy Code.

As a result of the extension of the price determination date fromJune 7, 2006 to July 6, 2006, the pricing terms of the tenderoffer and consent solicitation have been recalculated.

The total consideration for the Senior Secured Notes and SeniorSubordinated Notes was determined as of 10:00 a.m., New York Citytime, July 6, 2006, by reference to a fixed spread of 50 basispoints above the yield to maturity of the applicable U.S. Treasurysecurity as described in the Offer to Purchase and ConsentSolicitation Statement of the Issuers, dated May 25, 2006. Thereference yield for the Notes was 5.408%.

The total consideration per $1,000 principal amount of SeniorSecured Notes that are validly tendered prior to Midnight, NewYork City time, on July 20, 2006 will be $1,097.74, and the totalconsideration per $1,000 principal amount of Senior SubordinatedNotes that are validly tendered prior to the Expiration Date willbe $1,116.13. In each case, the total consideration per $1,000principal amount of Notes that are validly tendered prior to theExpiration Date includes a cash consent payment of $30. Holdersof Notes validly tendered prior to the Expiration Date will alsoreceive accrued and unpaid interest on their Notes up to, but notincluding, the payment date for the tender offer and consentsolicitation.

As of July 6, 2006, the Issuers had received tenders and consentsfor $195.5 million in aggregate principal amount of the SeniorSecured Notes, representing 97.8% of the outstanding SeniorSecured Notes and $53 million in aggregate principal amount of theSenior Subordinated Notes, representing 100% of the outstandingSenior Subordinated Notes. The tender offer and consentsolicitation remains open and is scheduled to expire on theExpiration Date.

The tender offer and consent solicitation are subject to thesatisfaction of certain conditions, including the consummation byH&E Inc. of one or more debt financings on terms satisfactory toH&E Inc. in an aggregate amount not less than $250 million andconsent of the lenders under H&E Inc.'s senior secured creditfacility. No assurance can be given that such conditions will besatisfied, that such new financing will be completed in a timelymanner or at all or that such consent will be obtained.

The complete terms and conditions of the tender offer and consentsolicitation are described in the Statement and the relatedConsent and Letter of Transmittal, copies of which may be obtainedby contacting the information agent for the tender offer andconsent solicitation:

Based in Baton Rouge, Louisiana, H&E Equipment Services, Inc.,(NASDAQ:HEES) -- http://www.he-equipment.com/-- is one of the largest integrated equipment services companies in the UnitedStates with 47 full-service facilities throughout theIntermountain, Southwest, Gulf Coast, West Coast and Southeastregions of the United States. The Company is focused on heavyconstruction and industrial equipment and rents, sells andprovides parts and service support for four core categories ofspecialized equipment: hi-lift or aerial platform equipment;cranes; earthmoving equipment; and industrial lift trucks.

HERBALIFE INT'L: To Undertake Potential Refinancing---------------------------------------------------Herbalife Ltd. and its indirect subsidiary HerbalifeInternational, Inc., disclosed that it is considering a potentialrefinancing transaction with a new senior secured credit facility.If the refinancing is consummated, certain of the proceeds may beused to repay or redeem substantially all of Herbalife's existingdebt, including its outstanding 9 1/2% Notes due 2011 and fundclosing costs.

About Herbalife

Herbalife (NYSE:HLF) -- http://ir.herbalife.com/-- is a global network marketing company that sells weight-management,nutritional supplements and personal care products intended tosupport a healthy lifestyle. Herbalife products are sold in 62countries through a network of more than one million independentdistributors. The company supports the Herbalife FamilyFoundation and its Casa Herbalife program to bring good nutritionto children.

* * *

As reported in the Troubled Company Reporter on July 4, 2006,Moody's Investors Service rated the proposed bank loan ofHerbalife International, Inc. at Ba1 and upgraded the corporatefamily rating to Ba1. Herbalife will use proceeds from the newdebt to repay the existing term loan and to redeem the$165 million issue of 9.5% senior subordinated notes.

At the same time, Standard & Poor's Ratings Services raised itsratings on Herbalife International Inc., including its corporatecredit rating to 'BB+' from 'BB'. Standard & Poor's also raisedits ratings on Herbalife's parent, Herbalife Ltd., including thecorporate credit rating to 'BB+' from 'BB'. The outlook isstable.

HIDDEN POINTE: Partner Doesn't Get Automatic Stay Protection------------------------------------------------------------The Honorable James E. Massey of the U.S. Bankruptcy Court for theNorthern District of Georgia ruled that the automatic stayafforded to Hidden Pointe Properties, L.P., under Section 362 ofthe Bankruptcy Code does not extend to the Debtor's alleged defacto general manager, Wilmann LLC.

These Hidden Pointe's creditors, then, can pursue their statecourt actions against Wilmann:

The creditors, however, have dismissed those cases after Wilmannasked the Court to prohibit them from proceeding with the suitstemporarily.

The Creditors allege that Wilmann, legally a limited partner,assumed the role and duty of a general partner, and is responsibleto pay Hidden Pointe's debts. The Creditors say that Wilmann,through D. Curtis Mann and Donald Williams, actively participatedin the management and operation of Hidden Pointe and actively andaggressively directed and made significant decisions for thepartnership -- including trying to sell the apartments or itsoperations. Wilmann denied having liability to any of HiddenPointe's creditors because, Wilmann says, it's not the Debtor'sgeneral partner. No documents filed by Hidden Pointe in itsbankruptcy case identify Willman as a general partner or creditor.Wilmann makes no claim against Hidden Pointe's estate.

In a decision published at 2005 WL 3952887, Judge Massey opinedthat if Wilmann is not a general partner, it is not entitled toinjunctive relief because the outcome of state court litigationcould have no effect on the Debtor its estate or its creditors.

Judge Massey pointed out that, as a general proposition, theautomatic stay does not extend to non-bankrupt co-defendants.Wilmann could have obtained an exception under Section 105 of theBankruptcy Code if it could have shown (1) a substantiallikelihood of success on merits; (2) a substantial threat ofirreparable injury if an injunction were not granted; (3) that thethreatened injury to it outweighs the harm an injunction may causethe creditors; and (4) that granting an injunction would notdisserve public interest. Willman didn't meet this four-prongedtest.

INTEGRATED ELECTRICAL: Amends Eton Park Term Loan Agreement-----------------------------------------------------------In a filing with the Securities and Exchange Commission, Curt L.Warnock, senior vice president and general counsel of IntegratedElectrical Services, Inc., disclosed that on June 29, 2006, thecompany entered into the First Amendment to the Term LoanAgreement with Eton Park Fund, L.P., and an affiliate, FlaggStreet Partners LP and affiliates, and Wilmington Trust Companyas administrative agent.

The First Amendment, dated June 1, 2006, amended the LoanAgreement, dated May 12, 2006, to, among other things,permit the Company to issue $1,000,000 in its common stock toTontine Capital Partners, L.P., in exchange for $1,000,000 incash.

Mr. Warnock reported that the company will use the proceeds toinvest $1,000,000 in Energy Photvoltaics, Inc., without thetransaction reducing the company's existing $2,000,000 limit onpermitted investments or violating the restriction ontransactions with affiliates contained in the Loan Agreement.

The company has also received the requisite consent to theTransaction from its lenders under the Loan and SecurityAgreement, dated May 12, 2006, by and among the Company, certainof its subsidiaries and Bank of America, N.A., and other lenders.

INTEGRATED ELECTRICAL: Restates December and March Financials-------------------------------------------------------------In a filing with the Securities and Exchange Commission,Integrated Electrical Services, Inc., corrects a misstatement ofinsurance expense in its financial reports for the three monthsended December 31, 2005, and the three and six months endedMarch 31, 2006.

Senior Vice President and Chief Financial Officer David A. Millerdiscloses that on the company's Consolidated Statements ofOperation, net loss from continuing operations and net lossincreased by:

Mr. Elmquist assures the Court that his firm is a "disinterestedperson" as that term is defined in Section 101(14) of theBankruptcy Code.

Headquartered in Addison, Texas, International Galleries Inc. -- http://www.igi-art.com/-- sponsors artists and sells their artwork through referrals. The company filed for chapter 11protection on Jan. 31, 2006 (Bankr. N.D. Tex. Case No. 06-30306).Omar J. Alaniz, Esq., at Neligan Tarpley Andrews & Foley LLP,represents the Debtor. David W. Elmquist, Esq., at WinsteadSechrest & Minick P.C., represents the Official Committee ofUnsecured Creditors. On May 16, 2006, the case was converted to aChapter 7 liquidation. Dan Lain serves as the Chapter 7 Trusteefor the Debtor. When the Debtor filed for protection from itscreditors, it estimated assets less than $50,000 and debts between$10 million to $50 million.

Freedman & Goldberg, CPA, in Farmington Hills, Michigan, raisedsubstantial doubt about Jove Corp's ability to continue as a goingconcern after auditing the Company's consolidated financialstatements for the year ended Dec. 31, 2005. The auditor pointedto the Company's losses from operations since inception.

About Jove Corp

Based in Berkley, Michigan, Jove Corporation engages in thedevelopment and commercialization of the developmental softwarefor the network supported by major banking institutions. TheCompany owns 100% interest in Innovative Business Systems, LLC, anapproved IBM software development partner. In addition, it has27.4% interest in MessageWay Solutions, Inc., which providesmiddleware software solutions that enable user companies tocommunicate with their customers' and suppliers' database andsoftware applications.

The affirmation follows the company's announcement of an increasein the size of its term loan by $50 million. This additionalborrowing will help fund the acquisition of four hospitals fromHCA Inc.

The rating reflects LifePoint's aggressive growth strategy,uncertain reimbursement rates from Medicare and managed careclients, and moderately high leverage, highlighted by the April2005 acquisition of Province Healthcare Inc., and the long-awaitedacquisition of four hospitals from HCA. These acquisitions havehelped strengthen the company's business profile by increasing thesize and diversity of its hospital portfolio to 53 facilitiesin 20 states, from 30 hospitals in nine states.

In addition, the acquisitions have improved the company's payormix by lessening its concentration in any state, particularly withregard to Kentucky.

Still, LifePoint, assuming it completes the acquisition of fourhospitals from HCA, has more than doubled its size within areasonably short period of time.

"This has created the challenge of effectively operating amuch-enlarged organization. The company has had unexpecteddifficulties with certain acquired hospitals. LifePoint alsoremains subject to uncertain third-party reimbursement," saidStandard & Poor's credit analyst David Peknay.

LIGAND PHARMACEUTICALS: Settles Securities Fraud Suit in Calif.---------------------------------------------------------------Ligand Pharmaceuticals Inc. has settled the securities classaction litigation filed in the U.S. District Court for theSouthern District of California against the company and certain ofits directors and officers.

In addition, the company has also reached an agreement to settlethe shareholder derivative actions filed on behalf of the companyin the Superior Court of California and the U.S. District Courtfor the Southern District of California.

The settlements, which are subject to court approval, resolve allclaims by the parties, including those asserted against Ligand andthe individual defendants in these cases.

Under the agreements, in exchange for a release of all claims, thecompany will pay a total of $12.15 million in cash. The company'sinsurance carrier will fund the settlement amounts and a portionof the company's total legal expenses while the Company will paythe remainder of the legal fees.

As part of the settlement of the state derivative action, thecompany has agreed to adopt certain corporate governanceenhancements.

Neither the company nor any of its current or former directors andofficers made any admission of liability or wrongdoing.

A related investigation by the Securities and Exchange Commissionis ongoing and is not affected by the settlements.

"Although Ligand believes these suits are without merit, theCompany is pleased to put the uncertainty, expense, and managementtime drain of the class action and derivative litigation behind itand believes that the decision to settle is in the best interestsof its shareholders," said David E. Robinson, Ligand Chairman,President and Chief Executive Officer.

"Settling this litigation will also facilitate continued fullfocus of our organization on the ongoing strategic alternativesprocess and the Company's business," Mr. Robinson added.

At March 31, 2006, the Company's balance sheet showed a$224,358,000 stockholders' deficit. The Company reported$110,419,000 of stockholders' deficit at Dec. 31, 2005.

LONDON FOG: Perry Ellis Demands $200,000 Expense Reimbursement--------------------------------------------------------------Perry Ellis International, Inc., asks the U.S. Bankruptcy Courtfor the District of Nevada to determine that the $200,000 it isasking from London Fog Group, Inc., and its debtor-affiliates asreimbursement for its expenses as a stalking-horse bidder to thesale the Debtor's Pacific Trail brands is reasonable.

As reported in the Troubled Company Reporter on March 31, 2006,Columbia Sportswear Company outbid Perry Ellis with a$20.4 million cash bid plus the assumption of certain liabilities.

Under the original asset purchase agreement between the Debtorsand Perry Ellis, Perry Ellis is entitled to a $397,750 breakup feeand a $200,000 expense reimbursement if it loses at the auction.The breakup has been paid.

Perry Ellis asked the Debtors and the Official Committee ofUnsecured Creditors to sign an agreed order on the expensereimbursement. The Debtors and the Committee agreed but wantedWachovia National Bank Association and DDJ Capital Management,LLC, as parties to the agreed order. Wachovia is the Debtors'senior secured lender while DDJ Capital is their junior securedlender. DDJ Capital refused to sign the agreed order based on thebelief that the Debtors' estates may have claims against PerryEllis in connection with a post-closing agreement between PerryEllis, Columbia and Levi Strauss & Company relating to Columbia'ssubsequent transfer of the Dockers' license to Perry Ellis.

Jeffrey L. Hartman, Esq., at Hartman & Hartman reminds the Courtthat Perry Ellis is already entitled to expense reimbursementbased on prior Court orders. Additionally, as a result of PerryEllis' participation in the auction process, the Debtors were ableto sell the assets for $20.4 million. The stalking horsetransaction directly and substantially benefited the Debtors andtheir estates, Mr. Hartman contends.

Headquartered in Seattle, Washington, London Fog Group, Inc. --http://londonfog.com/-- designs and retails the latest styles in jackets and other professional apparel. The company and six ofits affiliates filed for chapter 11 protection on March 20, 2006(Bankr. D. Nev. Case No. 06-50146). Stephen R. Harris, Esq., atBelding, Harris & Petroni, Ltd., represents the Debtors in theirrestructuring efforts. Avalon Group, Ltd., serves as the Debtors'financial advisor. When the Debtors filed for protection fromtheir creditors, they estimated assets and debts between$50 million to $100 million.

MESABA AVIATION: U.S. Trustee Wants Monthly Reports Filed On Time-----------------------------------------------------------------Habbo G. Fokkena, U. S. Trustee for Region 12, asks the UnitedStates Bankruptcy Court for the District of Minnesota to compelMesaba Aviation, Inc., dba Mesaba Airlines, to submit alldelinquent operating reports, and to timely submit all futureoperating reports as is necessary.

The U. S. Trustee complains that the Debtor failed to submitoperating reports for April and May 2006.

"Failure to submit the operating reports denies creditors and theU.S. Trustee the ability to monitor the Debtor's post petitionoperations, including losses and accrued liabilities," Sarah J.Wencil, trial attorney for the U.S. Trustee, tells the Court.

Ms. Wencil notes that the Bankruptcy Code and Rules requiredebtors to submit monthly operating reports and file thosereports with the Court.

The Debtor should be compelled to become current and stay currentwith that duty, particularly in the circumstances of the Chapter11 case where the Debtor is alleging large monthly losses ofmoney and threatening to liquidate if certain of its requests arenot granted, Ms. Wencil explains.

Debtor Responds

For several months, MAIR Holdings, Inc., the Debtor's owner, hasengaged Deloitte & Touche to assist it in preparing its annualForm 10-K to be filed with the Securities and ExchangeCommission, Will R. Tansey, Esq., at Ravich, Meyer, Kirkman,McGrath & Nauman, in Minneapolis, Minnesota, tells the Court.

In connection with Deloitte's audit of MAIR's financialstatements, Deloitte must audit the financial reports of theDebtor.

Mr. Tansey points out that Deloitte's audit has been complicatedby the deadline for filing proofs of claims for non-governmentalentities in the Chapter 11 case. Deloitte, MAIR, and the Debtorare engaged in an extensive analysis of the likely liability ofthe Debtor on a significant number of claims filed at the end ofFebruary.

In light of the ongoing audit, the Debtor was unable to close itsbooks for March 2006 until Deloitte had substantially completedits audit of March results -- causing a delay in the preparationand service of the March monthly operating report, Mr. Tanseyasserts. Consequently, the delay in finalizing the Marchoperating report made it impossible for the Debtor to timelyprepare and serve operating reports for April and May.

Mr. Tansey notes that the Debtor has already served the U.S.Trustee with the April operating report on June 24, 2006, and theDebtor intends to finalize and file the May operating report byJuly 7. The Debtor believes that it will be able totimely prepare and serve future reports on the 25th of eachmonth.

MESABA AVIATION: Renews Request to Reject CBAs with Unions----------------------------------------------------------Mesaba Aviation, Inc., dba Mesaba Airlines, renews its request andasks the U.S. Bankruptcy Court for the District of Minnesota forpermission to reject its collective bargaining agreements with theAir Line Pilots Association, International, the Association ofFlight Attendants-CWA, AFL-CIO, and the Aircraft MechanicsFraternal Association, pursuant to Section 1113(c).

The Honorable Gregory F. Kishel had previously denied the Debtorto reject its CBAs with the unions.

The Debtor tells the Court that it revised its Section 1113proposals to the unions to correct the defects identified by theCourt and presented each union with a comprehensive writtenproposal to modify their CBAs.

According to Michael L. Meyer, Esq., at Ravich Meyer KirkmanMcGrath & Nauman, in Minneapolis, Minnesota, each proposal wasaccompanied by a spreadsheet showing:

(a) the group's target savings number, based on a 19.4% cost reduction;

(b) how the Debtor proposed for each group to meet its target; and

(c) the underlying costing of each of the line items that was identified as a savings target.

Mr. Meyer submits that the Term Sheets, the Costing Sheets, andthe underlying Business Plan:

(a) were based on the most complete and reliable information available to the Debtor at the time the proposals were made; and

(b) assure that the employees are treated fairly and equitably.

The Debtor arranged for all union negotiators to be released fromduty for the purpose of preparing for and attending bargainingmeetings with the Debtor. The Debtor met with the unionrepresentatives as often as they made themselves available.

The Debtor responded to numerous information requests from AMFA,AFA, and ALPA and gave the unions all relevant information as isnecessary to evaluate the Debtor's proposals, Mr. Meyer relates.

The Debtor has stated consistently that consensual agreementswith its unions are the most desired outcome. To date, however,the Debtor has reached agreement only with the Transport WorkersUnion of America.

AMFA, AFA and ALPA adhere to the position that the Debtor doesnot need 19.4% in labor savings for six years, Mr. Meyer says.

The Debtor has made all reasonable efforts to explain thenecessity of firmly identifying the cost structure it needs toparticipate in the immediate process of negotiating Northwest'sacceptance of the Omnibus ASA, now reduced to addressing only 49Saabs, and following through on a conditional bid it placed onJanuary 17, 2006, as amended on January 31, 2006, in response toa Northwest RFP for 126 regional jet aircraft.

The Debtor notes that its survival is dependent on securingrelief under Sec. 1113(c) of the Bankruptcy Code, as itcontinues to lose money at the rate of approximately $2,000,000to $3,000,000 per month.

Absent any DIP financing, the accelerating losses will result inthe Debtor exhausting its cash by the end of August 2006.

The Debtor believes, and has so advised the unions, that theirreasons for refusing to bargain do not constitute good cause andthat a delay in the Section 1113(c) process seriously jeopardizesthe Debtor's ability to not only survive, but to take timelysteps to put in place the principal building block of its plan ofreorganization -- the commitment for future business.

With AMFA, AFA and ALPA failing to provide good cause forrejecting the Debtor's proposal, the Debtor has no alternativebut to seek authority to reject the CBAs in accordance with theBankruptcy Code, Mr. Meyer says.

MESABA AVIATION: Court Approves Aircraft Use Pact With Northwest----------------------------------------------------------------The Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for theDistrict of Minnesota gave Mesaba Aviation, Inc., dba MesabaAirlines, permission to enter into the Aircraft Use and ReturnConditions Agreement with Northwest Airlines Inc.

The Debtor currently operates a fleet of commercial aircraftleased or subleased from Northwest Airlines, Inc., pursuant to anAirline Services Agreement dated August 29, 2005. As of thePetition Date, the Debtor leased or subleased 35 AVRO 146-RJ85Aaircraft in addition to Saab aircraft.

As part of its reorganization, Northwest has determined to removethe AVROs, including the Aircraft from the Debtor's fleet priorto the termination dates specified in the subleases.

According to Will R. Tansey, Esq., at Ravich Meyer KirkmanMcGrath & Nauman, in Minneapolis, Minnesota, Northwest'sdetermination to remove the Debtor's AVROs from its fleet andflight schedule raises issues related to the Debtor's obligationsunder the ASA and the subleases, including the Debtor'sobligations to meet return conditions.

Both Northwest and the Debtor are operating in Chapter 11 andneither has assumed or rejected the relevant contracts, Mr.Tansey reminds the Court.

To address the considerable uncertainty surrounding both parties'rights and obligations under the subleases, the Debtor andNorthwest entered into an aircraft use and return conditionsagreement.

The Agreement amends certain lease and sublease agreementspursuant to which the Debtor:

The amendments provide for an earlier termination date, andmodifies and resolves any disputes concerning the requiredAircraft return conditions specified in each sublease agreement.

Mr. Tansey asserts that the Agreement permits the Debtor andNorthwest to focus on reorganization, and avoid potentiallysignificant litigation costs related to the amount and priorityof claims associated with returning the Aircraft.

MIRANT CORP: U.S. Trustee Wants Ch. 11 Cases of 13 Units Dismissed------------------------------------------------------------------William T. Neary, the U.S. Trustee for Region 17, asks JudgeMichael D. Lynn of the U.S. Bankruptcy Court for the NorthernDistrict of Texas to dismiss the Chapter 11 cases of 13 debtoraffiliates of Mirant Corporation:

Assistant U.S. Trustee George F. McElreath relates that the 13Debtors have ceased to exist either by virtue of a motionapproving a merger or dissolution of each of the entities grantedby the Court or by virtue of the terms of the Plan ofReorganization.

Moreover, pursuant to Section 1930(a)(6) of the JudicialProcedures Code, the quarterly fees due to the U.S. Trustee willcontinue to accrue in each case until it is closed, dismissed orconverted to another chapter.

Mr. McElreath tells the Court that in spite of any merger ordissolution that may have taken place, each of the 13 cases isconsidered an open case for quarterly fee purposes. Accordingly,as a matter of good housekeeping, it would be in the best interestof creditors and the Debtors' estates for the Court to orderdismissal of each of the cases, he says.

Headquartered in Atlanta, Georgia, Mirant Corporation --http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590), and emerged under the terms of aconfirmed Second Amended Plan on January 3, 2006. Thomas E.Lauria, Esq., at White & Case LLP, represented the Debtors intheir successful restructuring. When the Debtors filed forprotection from their creditors, they listed $20,574,000,000 inassets and $11,401,000,000 in debts. (Mirant Bankruptcy News,Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)

* * *

As reported in the Troubled Company Reporter on Dec. 8, 2005,Standard & Poor's Ratings Services assigned its 'B+' corporatecredit rating to power generator and developer Mirant Corp. andsaid the outlook is stable. That rating reflected the creditprofile of Mirant, based on the structure the company expects tohave on emergence from bankruptcy at or around year-end 2005,S&P said.

MIRANT CORP: NY-Gen Unit to Repair Swinging Bridge Dam Property---------------------------------------------------------------The Honorable Michael D. Lynn of the U.S. Bankruptcy Court for theNorthern District of Texas allowed Mirant NY-Gen, LLC, to use itsestate property to do remediation in one of its hydroelectricfacilities.

Mirant NY-Gen, LLC, discovered a sinkhole in the property -- theSwinging Bridge Dam -- in May 2005. As a result, Mirant NY-Genceased its operation of the facility.

Pursuant to the direction of the Federal Energy RegulatoryCommission, Mirant NY-Gen took all the necessary steps to addressthe sinkhole by:

* implementing a systematic plan for testing and evaluating the integrity of the dam; and

* engaging in repairs of the sinkhole and related damage to the dam.

Jeff P. Prostok, Esq., at Forshey & Prostok LLP, in Fort Worth,Texas, noted that Mirant NY-Gen and the FERC's experts andadvisors have identified and analyzed elements of a finalremediation plan for the Swinging Bridge Dam.

In a letter dated June 14, 2006, the FERC approved the finalremediation plan to address the safety issues raised byremediation of the Swinging Bridge Dam. The FERC directed MirantNY-Gen to implement the Final Remediation Plan.

Headquartered in Atlanta, Georgia, Mirant Corporation --http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590), and emerged under the terms of aconfirmed Second Amended Plan on January 3, 2006. Thomas E.Lauria, Esq., at White & Case LLP, represented the Debtors intheir successful restructuring. When the Debtors filed forprotection from their creditors, they listed $20,574,000,000 inassets and $11,401,000,000 in debts. (Mirant Bankruptcy News,Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)

* * *

As reported in the Troubled Company Reporter on Dec. 8, 2005,Standard & Poor's Ratings Services assigned its 'B+' corporatecredit rating to power generator and developer Mirant Corp. andsaid the outlook is stable. That rating reflected the creditprofile of Mirant, based on the structure the company expects tohave on emergence from bankruptcy at or around year-end 2005,S&P said.

MUSICLAND HOLDING: Court OKs Stipulation Paying Postpetition Debts------------------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New Yorkapproved Musicland Holding Corp. and its debtor-affiliates'Stipulation with Licensing Ventures, Inc.

As reported in the Troubled Company Reporter on Jun 7, 2006, theDebtors and LVI stipulate that:

(1) in full and final settlement of LVI's Motion to Compel the Debtors to pay postpetition expenses, and of all claims asserted by LVI, the Debtors will pay LVI $239,492, representing the difference between:

* $387,500, which as agreed on by the Parties will constitute LVI's allowed administrative claim; and

* $148,007, which LVI owes and is obligated to turn over to the Debtors, but which the Debtors will allow LVI to retain under the settlement.

(2) the Debtors will make the Settlement Payment to LVI without delay;

(3) the Debtors will no longer be obligated to hold $622,138 in Internet sale proceeds in a separate account;

(4) LVI's Motion to Compel will be withdrawn, without prejudice;

(5) the Supply Agreement and the License Agreement will be deemed rejected as of March 22, 2006; and

(6) LVI and the Debtors mutually release and waive any and all claims asserted against each other.

Headquartered in New York, New York, Musicland Holding Corp., is aspecialty retailer of music, movies and entertainment-relatedproducts. The Debtor and 14 of its affiliates filed for chapter11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,represents the Debtors in their restructuring efforts. Mark T.Power, Esq., at Hahn & Hessen LLP, represents the OfficialCommittee of Unsecured Creditors. When the Debtors filed forprotection from their creditors, they estimated more than $100million in assets and debts. (Musicland Bankruptcy News, IssueNo. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)

At the same time, Standard & Poor's affirmed its 'BBB-' corporatecredit rating on the Canonsburg, Pa.-based generic drug maker.Standard & Poor's will withdraw its 'BBB-' senior secured debtrating on Mylan at the completion of the new credit facility.

The rating actions reflect Mylan's continued solid position in theexpanding generic drug industry and new $700 million revolvingcredit facility's unsecured status, meaning that lenders will fareno better than other unsecured creditors in the event of paymentdefault.

At the same time, Standard & Poor's assigned its 'B-' secured bankloan rating to NES's proposed $430 million second-lien term loanfacility due in seven years. A recovery rating of '4' wasassigned, indicating marginal prospects for recovery followingrepayment of the entire principal amount of the unrated $450million first-lien revolving ABL facility in the event of adefault. Ratings on the existing second-lien term loan will bewithdrawn when the deal is expected to close in July 2006.

The outlook is stable. The Chicago, Illinois-based company'ssales for 2005 approached $600 million and its total debtoutstanding was about $430 million.

"The affirmation reflects our view that NES's credit profile willremain within metrics commensurate for the existing rating, andthe expectations that the company will continue to demonstratefinancial and operational discipline," said Standard & Poor'scredit analyst John R. Sico.

NES has signed a definitive agreement to sell the company to anaffiliate of Diamond Castle Holdings LLC, a private equity firm,in a transaction valued at $850 million.

The unsecured ratings of Nortel remain at B (low) with the Companyrecently completing a $2 billion debt refinancing that has givenNortel a 100% unsecured debt structure. Despite the removal ofthe secured debt from its capital structure, DBRSmaintained the unsecured ratings of Nortel at B (low), reflectingheightened concerns about Nortel's ability to improve itsoperating performance despite the Company implementing a strategyto improve its competitive position over the medium term.

DBRS's concerns are predominantly attributable to revenue andmargin pressures resulting from customer consolidation and theincreasing presence of emerging market vendors in both thewireline and wireless segments, both of which negatively impactedQ1 2006 results.

However, DBRS does acknowledge that this recent debt issuanceextends the Company's debt maturity profile, with the nearest debtmaturity being $1.8 billion in 2008. In addition, Nortel willmaintain a cash balance of approximately $2.6 billion pro formathe debt issuance, which provides the Company with a significantcushion to absorb contingencies, such as potential cashsettlements relating to the U.S. Securities and ExchangeCommission and Ontario Securities Commission investigations.

In addition, Nortel will need to make substantial payments relatedto pension funding and cash payments relating to previousrestructuring initiatives; thus, Nortel's debt levels are expectedto remain high for the near term.

DBRS will continue to monitor Nortel's progress on several keyissues over the next 18 months. These issues include theCompany's ability to grow revenues above the current$10.5 billion annual run rate while keeping its gross marginsabove 40%; and the implementation of its new financial reportingsystem. The system should assist management in providing moretimely reporting and helping to resolve several of the outstandingmaterial weaknesses relating to internal controls, which haveweighed negatively against the Company's credibility.

DBRS notes that if Nortel can improve its cash flow fromoperations over the medium term, which targets approximately$1.5 billion in margin improvements over the next three years,while resolving most of its outstanding contingencies without asignificant deterioration of its current financial profile, thepotential for ratings improvement may exist.

NORTHWEST AIRLINES: Flight Attendants Choose AFA-CWA as New Rep--------------------------------------------------------------Northwest flight attendants elected the Association of FlightAttendants-CWA as their new bargaining representative on Thursday.AFA-CWA received 4,349 votes. The total vote exceeded the RailwayLabor Act requirement that 50% plus one of unit members vote inthe election in order to change representation.

"Despite the many obstacles along the path, Northwest flightattendants today took control of their careers and joined forceswith the strongest flight attendant union in the world," PatriciaFriend, AFA-CWA International President, said. "For the firsttime in a long while, our sisters and brothers at Northwest havehope. They are hopeful that with AFA-CWA's wealth of experiencein negotiating with airlines in bankruptcy, their careers will beprotected."

AFA-CWA plans to begin negotiations immediately with the company.On June 30, a federal bankruptcy judge gave Northwest permissionto impose terms detailed in a tentative agreement that the flightattendants struck down earlier this year if an agreement could notbe reached within two weeks.

AFA-CWA launched the organizing campaign in September 2005 after acoalition of Northwest flight attendants approached the unionseeking new representation. From the beginning, the NorthwestAFA-CWA campaign has been a model of grassroots organizing. WhileAFA-CWA supported their efforts at every opportunity, this was acampaign initiated, led, and conducted by Northwest flightattendants.

For over 60 years, the Association of Flight Attendants --http://www.afanet.org/-- has been serving as the voice for flight attendants in the workplace, in the aviation industry, in themedia and on Capitol Hill. More than 46,000 flight attendants at20 airlines come together to form AFA-CWA, the world's largestflight attendant union. AFA is part of the 700,000-member strongCommunications Workers of America, AFL-CIO.

About Northwest Airlines

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit,Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, andapproximately 1,400 daily departures. Northwest is a member ofSkyTeam, an airline alliance that offers customers one of theworld's most extensive global networks. Northwest and its travelpartners serve more than 900 cities in excess of 160 countries onsix continents. The Company and 12 affiliates filed for chapter11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP inWashington represent the Debtors in their restructuring efforts.The Official Committee of Unsecured Creditors has retained AkinGump Strauss Hauer & Feld LLP as its bankruptcy counsel in theDebtors' chapter 11 cases. When the Debtors filed for protectionfrom their creditors, they listed $14.4 billion in total assetsand $17.9 billion in total debts.

ONEIDA LTD: Equity Committee Hires Brown Rudnick as Counsel-----------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New Yorkallowed the Official Committee of Equity Security Holders inOneida Ltd., and its debtor-affiliates' chapter 11 cases to hireBrown Rudnick Berlack Israels LLP as its counsel, nunc pro tunc toMay 22, 2006.

Brown Rudnick was originally retained by an ad hoc committee ofstockholders. Three former members of that ad hoc committeecomprise the Equity Committee. As part of that prior engagement,Brown Rudnick, among other things:

(a) developed a significant knowledge base regarding the Debtors;

(b) began reviewing the numerous bankruptcy and other legal issues that will drive the maximization of value to stockholders; and

(c) successfully petitioned the Court for the appointment of the Equity Committee.

Brown Rudnick will:

(a) assist and advise the Equity Committee in its discussions with the Debtors and other parties in interest regarding the overall administration of the Debtors' chapter 11 cases;

(b) represent the Equity Committee at hearings to be held before the Court and communicating with the Equity Committee regarding the matters heard and the issues raised as well as the decisions and considerations of the Court;

(c) assist and advise the Equity Committee in its examination and analysis of the conduct of the Debtors' affairs;

(d) review and analyze pleadings, orders, schedules, and other documents filed and to be filed with the Court by interested parties in the Debtors' Chapter 11 cases; advise the Equity Committee as to the necessity, propriety, and impact of the foregoing upon these cases; and consent or object to pleadings or orders on behalf of the Equity Committee, as appropriate;

(e) assist the Equity Committee in preparing the applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Equity Committee, including all trial preparation as may be necessary;

(f) confer with the professionals retained by the Debtors and other parties-in-interest, as well as with other professionals as may be selected and employed by the Equity Committee;

(g) coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals, as well as any information as may be received from professionals engaged by the Equity Committee or other parties-in-interest in the Debtors' chapter 11 cases;

(h) participate in examinations of the Debtors and other witnesses as may be necessary in order to analyze and determine, among other things, the Debtors' assets and financial condition, whether the Debtors have made any avoidable transfers of property, or whether causes of action exist on behalf of the Debtors' estates;

(i) negotiate and formulate a plan of reorganization for the Debtors; and

(j) assist the Equity Committee generally in performing other services as may be desirable or required for the discharge of the Equity Committee's duties pursuant to Section 1103 of the Bankruptcy Code.

Other Brown Rudnick attorneys or paraprofessionals will provideadditional supporting legal services on behalf of the EquityCommittee. These hourly rates for Brown Rudnick's attorneys andparaprofessionals are currently in effect:

Attorneys $200 to $825 Paraprofessionals $175 to $240

Mr. Stark assured the Court that his firm and its professionals donot hold any material interest adverse to the Debtors' estate andare disinterested as that term is defined in Section 101(14) ofthe Bankruptcy Code.

Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/-- is the world's largest manufacturer of stainless steel andsilverplated flatware for both the Consumer and Foodserviceindustries, and the largest supplier of dinnerware to thefoodservice industry. Oneida is also a leading supplier of avariety of crystal, glassware and metal serveware for the tabletopindustries. The Company and its 8 debtor-affiliates filed forChapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. CaseNos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., atShearman & Sterling LLP represents the Debtors. Credit SuisseSecurities (USA) LLC is the Debtors' financial advisor. Scott L.Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg,Steindler, Houston & Rosen, P.C., represent the Official Committeeof Unsecured Creditors. Robert J. Stark, Esq., at Brown RudnickBerlack Israels LLP represents the Official Committee of EquitySecurity Holders. When the Debtors filed for protection fromtheir creditors, they listed $305,329,000 in total assets and$332,227,000 in total debts. On May 12, 2006, Judge Gropperapproved the Debtors' disclosure statement. Judge Groper has set10:00 a.m. on July 12, 2006, to consider confirmation of theDebtors' plan.

ONEIDA LTD: Equity Panel Slams PBGC's $50-Mil. "Allowed" Claim-----------------------------------------------------------------The Official Committee of Equity Security Holders appointed in thechapter 11 cases of Oneida Ltd. and its debtor-affiliates objectedto the proposed settlement agreement entered into among theDebtors, the Official Committee of Unsecured Creditors and thePension Benefit Guaranty Corporation.

Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP, inManhattan, said that the settlement, which deems allowed an"estimated" claim for the PBGC amounting to around $50 million,unfairly and inequitably prejudices the interests of equitysecurity holders.

According to Mr. Stark, the stipulated PBGC claim is grosslyoverstated and, therefore, not legally sustainable. The PBGC'salleged claim is predicated on the termination of one of theDebtors' pension plans and, in turn, the PBGC's obligation to payfuture benefits under the terminated plan. Under Section 502(b)of the, the PBGC's claim for future obligations must be discountedto its present value as of the Debtor's bankruptcy filing.

In calculating the PBGC's deemed allowed claim, the partiesutilized an overly conservative discount rate adopted by the PBGCfor non-bankruptcy purposes. Mr. Stark points out that this isnot in keeping with the law. Rather, the overwhelming weight ofauthority holds that those claims must be discounted using a"prudent investor" rate. The Equity Committee's experts haveconcluded that, due to this error, the stipulated claim isoverstated by about $24.8 million.

Mr. Stark adds that the stipulated PBGC claim is furtheroverstated due to certain miscalculations. In reaching the$50 million "deemed allowed" claim, the settling parties failedto:

(a) account for a claim off-set arising from value in an employee stock ownership plan; and

(b) reduce future benefits that are not legally sustainable under the Employee Retirement Income Security Act of 1974.

As a result of these miscalculations, the stipulated claim isoverstated by an additional $4 million, Mr. Stark contends.

Mr. Stark explains that the settlement unfairly and inequitablyprejudices the interests of equity security holders byartificially hindering their ability to present their valuationcase to the Court. As part of the settlement, the PBGC willreceive a nominal distribution under the pre-negotiated plan,while other similarly situated creditors receive full cashpayment. Under that agreement, the estimation of the PBGC claimis a gratuitous add-on, with no substantive justification otherthan creating a more difficult environment for the EquityCommittee to prove that stockholders are entitled to estate value.

Tellingly, Mr. Stark points out, the stipulated claim is effective"solely for purposes of the [Pre-Negotiated Plan]." Thus, if thatplan is not confirmed or respecting any other issue in theChapter 11 cases, the "deemed allowed" claim is not binding on anyparty and, presumably, the Debtors and the Official Creditors'Committee will institute litigation to reduce the amount of thePBGC's alleged claim. This qualifier speaks volumes about howresolute the Debtors and the Official Creditors' Committee are intheir belief that the stipulated claim amount is, in fact,sustainable.

Mr. Stark argues that the settlement prohibits distributions toequity security holders absent full satisfaction of the "deemedallowed" claim, regardless of whether it is sustainable, or unlessthe PBGC consents. In so doing, the settling parties afforded thePBGC the right to "claim" an artificially high entitlement toestate value, and also place the PBGC in the role of "gate-keeper"respecting any settlement discussions involving the EquityCommittee. This is entirely inappropriate, Mr. Stark laments.

Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/-- is the world's largest manufacturer of stainless steel andsilverplated flatware for both the Consumer and Foodserviceindustries, and the largest supplier of dinnerware to thefoodservice industry. Oneida is also a leading supplier of avariety of crystal, glassware and metal serveware for the tabletopindustries. The Company and its 8 debtor-affiliates filed forChapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. CaseNos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., atShearman & Sterling LLP represents the Debtors. Credit SuisseSecurities (USA) LLC is the Debtors' financial advisor. Scott L.Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg,Steindler, Houston & Rosen, P.C., represent the Official Committeeof Unsecured Creditors. Robert J. Stark, Esq., at Brown RudnickBerlack Israels LLP represents the Official Committee of EquitySecurity Holders. When the Debtors filed for protection fromtheir creditors, they listed $305,329,000 in total assets and$332,227,000 in total debts. On May 12, 2006, Judge Gropperapproved the Debtors' disclosure statement. Judge Groper has set10:00 a.m. on July 12, 2006, to consider confirmation of theDebtors' plan.

OPAL CONCEPTS: U.S. Trustee Wants Chapter 11 Cases Dismissed------------------------------------------------------------The U.S. Trustee for Region 16 asks the U.S. Bankruptcy Court forthe Central District of California to dismiss the chapter 11 casesof Opal Concepts, Inc., and its debtor-affiliates or to convertthem to chapter 7 liquidation proceedings.

Michael J. Hauser, Esq., tells the Court that the Debtors havenot paid their quarterly fees to the U.S. Trustee sinceApril 30, 2006. The U.S. Trustee had been informed that theDebtors currently have no cash on hand. Mr. Hauser pointed outthat under Section 1112(b) of the Bankruptcy Code, a debtor's casecan be dismissed for non-payment of fees required under Chapter123 of the Judiciary Procedures Code.

Mr. Hauser reminds the Court that under chapter 7, accrual of feeswill stop.

As reported in the Troubled Company Reporter July 7, 2006, HowardM. Ehrenberg, the responsible person appointed in the Debtors'cases and the Joint Committee of Creditors asked the Court forpermission to use certain settlement funds to pay the U.S. Trusteequarterly fees.

After the sale of substantially all of the Debtors' assets, theestates' remaining assets are claims that the Committee ispursuing against some of the Debtors' former directors andofficers and the Debtors' former outside accounting and auditingfirm. The Debtors' remaining prepetition liabilities total$27 million. Despite of the Debtors' lack of business operations,the U.S. Trustee continues to charge quarterly fees. The Debtorscurrently owe the U.S. Trustee $18,250.

The Debtor wants to use funds from the trust account of WinthropCouchet, the Creditors Committee's former counsel. The trustaccount, which has a $264,058 balance, was created by theCommittee to hold proceeds from the sale of some claims to CheveuxAcquisition, LLC.

Opal Concepts, Inc., used to manage Fantastic Sams, one of thelargest franchised hair salon chains in the country withapproximately 1,300 salons operating under its name. The Companyand its affiliates filed for bankruptcy on July 16, 2002 (Bankr.C.D. Calif. Case No. 02-15441). Michael A. Morris, Esq., of LosAngeles, Calif., represent the Debtors in their restructuringefforts. Ames Davis, Esq., of Nashville, Tenn., and Derek WEdwards, Esq., at Waller Lansden Dortch & Davis, represent theJoint Committee of Creditors. The Debtors no longer have businessoperations after selling substantially all of their assets.Howard M. Ehrenberg is the Debtors' sole employee and responsibleperson handling the Debtors' estates.

OWENS CORNING: Wants Plan-Filing Period Stretched to October 31---------------------------------------------------------------Owens Corning and its debtor-affiliates ask the U.S. BankruptcyCourt for the District of Delaware to further extend the exclusiveperiods within which they retain the exclusive right to file aplan of reorganization and solicit acceptances of that planthrough and including October 31, 2006.

The Debtors want the extension to give them adequate time tocomplete the necessary procedures to gain approval of theDisclosure Statement accompanying their Sixth Amended Plan ofReorganization, solicit votes on the Plan and, assuming the Courtconfirms the Plan, bring the Plan to effectivity.

Maintenance of exclusivity is appropriate and necessary tofacilitate the Debtors' prompt emergence from bankruptcy in lightof the key constituencies' support for the Sixth Amended Plan andgiven the scheduled July 10, 2006 Disclosure Statement Hearingand the September 18 Confirmation Hearing, Norman L. Pernick,Esq., at Saul Ewing LLP, in Wilmington, Delaware, says.

The Debtors assert that they have made substantial progresstowards their reorganization. In addition to the agreements theDebtors have reached with their major creditor groups, Mr.Pernick tells the Court that these major steps have been takentowards confirmation:

* The Debtors completed the process leading to the final decision on whether the plan should contain substantive consolidation and, as a result, the Sixth Amended Plan addresses the distributable values of the Debtors considered on a non-substantively consolidated basis;

* The Debtors completed the process leading to a decision estimating Owens Corning's aggregate present and future asbestos liabilities;

* The Debtors have analyzed and objected to the validity of numerous claims resulting in the disallowance or withdrawal of claims totaling $5.9 billion and the reduction of the Currently Disputed Claims by $1.8 billion, as of March 31, 2006;

* Through the end of November 2005, the Debtors had rejected approximately 75 nonresidential real property leases, assumed 12 nonresidential real property leases, and assumed and assigned nine nonresidential real property leases;

* The Debtors obtained a case management order relating to asbestos property damage claims and have resolved all but a handful of the hundreds of property damage cases originally filed for a fraction of the amounts originally claimed;

* The Debtors sought approval of a settlement in principal of two purported nationwide class actions on behalf of purchasers of its Mira Vista roofing tile products. The aggregate amount of the claims was $275 million -- although the claimants have asserted in pleadings filed with the Court that their claims total $80 million;

-- authorization for Owens Corning to consummate the terms of a Stock Purchase Agreement with Vitro, S.A. de C. V., and

-- the acquisition of the composites business of the Asahi Fiber Glass Co., Ltd. in Japan; and

* The Debtors have obtained approval to implement a foreign fund repatriation program for tax purposes, plan of reorganization and post-confirmation tax planning.

Mr. Pernick assures the Court that the requested exclusivityextension is not a negotiation tactic used to pressure creditors.The extension, he contends, will instead continue to allow theDebtors and their key constituencies to progress towardsconfirmation and emerge from bankruptcy this year.

The Debtors believe that the extension is reasonable, justified,appropriate and realistic under the circumstances of theirChapter 11 cases.

The Claims are based on a sales contract, entered on January 1,1997, for OCI to sell soda ash to Owens Corning.

The Debtors objected to Claim No. 6626 alleging that OCI willfullyviolated the automatic stay and anticipatorily breached thecontract. OCI asserted that the contract was a forward contractmerchant and, thus, OCI had the right to liquidate it withoutviolating the stay.

The Debtors and OCI later agreed to resolve their dispute. In asettlement agreement, the parties agree:

a. to allow the Claims as against Owens Corning, on a final basis, as general unsecured non-priority claims at these amounts:

* Claim No. 6626 for $225,000; and * Claim No. 6624 for $1,251,166;

b. that the allowance of the Claims are in full and final satisfaction of all claims, liabilities or demands relating to the contract; and

c. to release each other from all claims, liabilities and demands arising from the contract.

PARKWAY HOSPITAL: Exclusive Plan-Filing Period Extended to July 14------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New Yorkgave The Parkway Hospital, Inc. until:

a) July 14, 2006, to file a plan; and

b) Sept. 12, 2006, to solicit acceptances of that plan.

As reported in the Troubled Company Reporter on July 3, 2006,the Debtor told the Court that it needs the extension to negotiatesettlements with certain significant creditors.

The Debtor said it is narrowing down outstanding issues with theOfficial Committee of Unsecured Creditors in order to formulate aconsensual plan in final form.

The Parkway Hospital, Inc., operates a 251-bed proprietary, acutecare community hospital located in Forest Hills, New York. TheCompany filed for chapter 11 protection on July 1, 2005 (Bankr.S.D.N.Y. Case No. 05-14876). Timothy W. Walsh, Esq., at DLA PiperRudnick Gray Cary US LLP, represents the Debtor in itsrestructuring efforts. The firm of Alston & Bird LLP serves assubstitute bankruptcy counsel to the Official Committee ofUnsecured Creditors. When the Debtor filed for protection fromits creditors, it listed $28,859,000 in total assets and$47,566,000 in total debts.

PATH 1: American Stock Exchange to Delist Securities on July 17---------------------------------------------------------------The American Stock Exchange LLC(R) reported its finaldetermination to remove the common stock and common stock purchasewarrants of Path 1 Network Technologies, Inc. from listing on theExchange, and filed an application on Form 25 to strike theSecurities from listing with the Securities and ExchangeCommission. The delisting will become effective on July 17, 2006unless postponed by the SEC.

Pursuant to its rules, the Exchange provided notice to Path 1Network Technologies, Inc. of the decision to delist theSecurities and an opportunity to appeal the decision to a paneldesignated by the Exchange's Board of Governors.

About Path 1

Based in San Diego, California, Path 1 Network Technologies Inc.-- http://www.path1.com/-- provides a variety of software and services used for real-time, high-quality audio and video-on-demand distribution over Internet Protocol. Its Cx1000 broadcastvideo gateway is used to transmit and receive ASI and SDI videoimages over FastE and Gigabit Ethernet network interfaces.Paulson Capital owns almost 14% of it.

At March 31, 2006, the Company's balance sheet showed $2,333,000in total assets and $4,456,000 in total liabilities, resulting ina $2,136,000 stockholders' deficit.

PEABODY ENERGY: Buys Australian Coal Company for $1.34 Billion--------------------------------------------------------------Peabody Energy signed a merger implementation agreement to acquireExcel Coal Limited. Under the terms of the agreement, Peabodywill pay AU$8.50 per share ($6.21) in cash for all outstandingshares, representing a total acquisition price of approximately$1.34 billion plus assumed debt of approximately $190 million.

The acquisition is expected to be accretive to earnings per shareand cash flows in 2007, and significantly accretive beyond as newcapacity comes online. The transaction represents a 10.2% premiumover Excel's one-month weighted average share price.

"This transaction increases Peabody's position in the world'slargest coal-exporting nation, and marks another step in ourstrategy to expand into high-growth global markets," PeabodyPresident and Chief Executive Officer Gregory H. Boyce, said."The combined entity creates one of the largest coal companies inAustralia with some of the highest-quality products, mines andreserves. Excel is clearly the premier independent coal companyin Australia, and we have very high regard for both the people andthe assets."

Nearly one-third of the world's coal exports come from Australia,and the U.S. Energy Information Administration projects thatAustralian coal exports are expected to increase 55% by 2030.Australian metallurgical and thermal coal serves the fast-growingAsian markets that will account for the majority of growth in theglobal coal industry in coming decades.

The combination of Peabody's Australian operations and Excel'sassets creates a major new player in the Australian coal sector,with substantial market diversity, a broad portfolio ofmetallurgical and thermal coal products, both domestic andseaborne customers, and the capacity to utilize multiple railroadsand ports.

Peabody currently produces 9 million tons of mostly metallurgicalcoal per year in Queensland. The purchase provides Peabody withextensive growth opportunities from its core operations, alongwith major metallurgical and thermal coalmines in the latterstages of development by Excel Coal. Excel produced 5.6 milliontons of coal in calendar year 2005. Excel operations are expectedto produce up to 15 million tons in calendar year 2007, and up to20 million tons per year in 2008, from coalmines in New SouthWales and Queensland. The transaction also provides substantialsynergies in the areas of sales and trading, and reserve holdingsin Queensland near existing Peabody operations. Excel has morethan 500 million tons of metallurgical and thermal coal reserves.

The acquisition would greatly expand Peabody's existing Queenslandbase. In the past five years, Peabody purchased the Wilkie Creekthermal coal mine, acquired the Burton and North Goonyellametallurgical coalmines, developed the Eaglefield metallurgicalmine, and developed the Baralaba thermal and PCI mine. It alsomarks a return to New South Wales, where the company hassignificant experience and success.

The transaction by way of "Scheme of Arrangement" is subject tovarious approvals including regulatory, court, Excel shareholders,and other conditions. Excel's directors have agreed not tosolicit alternative proposals or competing transactions and not torespond to unsolicited approaches except as required by theirfiduciary duties. In addition, Peabody is entitled to areimbursement fee of AU$18 million under certain situationsoutlined in the merger implementation agreement. Closing istargeted for early in the fourth quarter 2006.

About Excel

Headquartered in Sydney, Australia, Excel Coal Company (ASX: EXL)-- http://www.excelcoal.com.au/-- produces a diverse range of products including thermal coal, hard coking coal, semi-softcoking coal and coke, most of which is sold under contract tomajor customers in both export and domestic markets. Excel'sexport production is shipped through the Port of Newcastle andPort Kembla.

About Peabody

Headquartered in St. Louis, Missouri, Peabody Energy Corp. (NYSE:BTU) -- http://www.peabodyenergy.com/-- is the world's largest private-sector coal company, with 2005 sales of 240 million tonsof coal and U.S.$4.6 billion in revenues. Its coal products fuel10% of all U.S. and 3% of worldwide electricity.

* * *

As reported in the Troubled Company Reporter on March 2, 2006,Moody's Investors Service upgraded Peabody Energy Corporation'scorporate family rating to Ba1 from Ba2 and senior unsecuredratings to Ba2 from Ba3.

PORTER HAYDEN: Dist. & Bankr. Court Approve Reorganization Plan---------------------------------------------------------------Following a rare joint hearing before the U.S. District Court forthe District of Maryland and the U.S. Bankruptcy Court for theDistrict of Maryland, the Chapter 11 reorganization plan forPorter Hayden Company was approved on July 7, 2006. An AsbestosTrust, a pool of funds for payment of tens of thousands ofexisting claimants and potentially thousands of future claimants,was also created.

The key component of Porter Hayden's Reorganization Plan is thecreation of the Asbestos Trust.

1) The Trust assets will include:

a) all insurance policies and proceeds or other payments made by asbestos insurance companies in respect of Porter Hayden's claims;

b) recoveries from the Manville Trust;

c) cash or cash equivalents received by Porter Hayden after its reorganization; and

d) 100% of the common stock of Porter Hayden.

2) The Asbestos Trust's purpose will be to:

a) assume Porter Hayden's asbestos bodily injury liabilities;

b) manage the affairs of Porter Hayden to maximize the value of its assets for the benefit of the asbestos claimants; and,

c) under the continuing jurisdiction of the Bankruptcy and District Courts, equitably distribute those assets to both present and future asbestos bodily injury claimants.

3) The Reorganization Plan included a Channeling Injunction, permanently enjoining the assertion of any asbestos claim against Porter Hayden or against its insurers who contribute to the funding of the Asbestos Trust.

"This reorganization accomplished precisely what was envisioned byCongress when it provided special legislation under Title 11 forAsbestos bankruptcies," Paul Nussbaum, counsel for Porter Haydenand chair of WTP's Bankruptcy Group, commented. "The Chapter 11case and the Plan of Reorganization enjoyed the unanimous supportof Asbestos claimants and has resulted in what will be enhancedrecoveries for victims of asbestosis poisoning and a comprehensivemethod of efficiently and equitably processing payment forexisting and future claimants."

About Porter Hayden

Headquartered in Baltimore, Maryland, Porter Hayden sold andinstalled insulation products. The Company went out of businessin 1989. Since then, its activities have been limited to runningoff its asbestos claims, securing insurance coverage for theclaims, and paying claims and related expenses. The Company filedfor chapter 11 protection on March 15, 2002 (Bankr. D. Md. CaseNo. 02-54152). Paul Nussbaum, Esq., at Whiteford, Taylor &Preston, LLP, represents the Debtor. Philip Milch, Esq., atCampbell & Levine, represents the Unsecured Creditors Committee.Edward Harron, Esq., at Young Conaway, is counsel for the LegalRepresentative for Future Asbestos Claimants.

PREDIWAVE CORP: Wants to Hire Latham & Watkins as Special Counsel-----------------------------------------------------------------PrediWave Corporation asks the U.S. Bankruptcy Court for theNorthern District of California for permission to hire Latham &Watkins LLP as its special counsel, nunc pro tunc toApril 14, 2006.

Latham & Watkins has served as principal litigation counsel to theDebtor since the Summer of 2005 and intends to continue in thatrole during the pendency of the Debtor's chapter 11 case.

From and after June 2005, Latham & Watkins' attorneys haverepresented the Debtor in two pending lawsuits. The first wasbrought against Jimmy Li and Fu Sze Shing for breach of fiduciaryduty, unfair competition, tortious interference with contract,tortious interference with prospective business advantage anddeclaratory relief. The second lawsuit, was brought by New WorldTMT Ltd., the holder of the Debtor's preferred stock and acontract party with Prediwave, against:

The Debtor and the other defendants agree that the Debtors willpay 30% of Latham's fees and expenses in connection with the NewWorld Action. The other defendants will pay the remaining70%.

Patrick E. Gibbs, Esq., a partner at the firm, discloses that asof the date of the filing of the Debtor's chapter 11 petition,Latham held around $91,000 as retainer. The Debtor made thesepayments to Latham during the 90-day period immediately precedingthe Debtor's bankruptcy filing:

-- $1,210,410.42 on January 17, 2006; -- $1,157,683.90 on January 27, 2006; -- $2,021,977.63 on March 6, 2006; and -- $2,602,977.07 on March 23, 2006.

With regards to the New World action, the Debtor paid$3,817,745.97 on April 7, 2006, of which $2,000,000 was aretainer. The second payment was made on May 9, 2006 in theamount of $1,400,000, and this payment was made for the purpose ofbringing the retainer back up to $2,000,000.

Mr. Gibbs assures the Court that his firm and its professionals donot hold material interest adverse to the Debtor's estate and aredisinterested as that term is defined in Section 101(14) of theBankruptcy Code.

Headquartered in Fremont, Calif., PrediWave Corporation --http://www.prediwave.com/-- provides cable and satellite operators with end-to-end digital broadcast platforms, and offersproducts like Video On Demand, Digital Video Recording,interactive video shopping, and subscription services. The Debtorfiled for chapter 11 protection on April 14, 2006 (Bankr. N.D.California Case No. 06-40547). Robert A. Klyman, Esq., at Latham& Watkins, LLP, represents the Debtor in its restructuringefforts. When the Debtor filed for protection from its creditors,it estimated more than $100 million in assets and more than$100 million in debts.

PREMIER AUTOMOTIVE: Maryland Port Administration Can Evict Debtor-----------------------------------------------------------------The Honorable James F. Schneider of the U.S. Bankruptcy Court forthe District of Maryland refused to breathe life into PremierAutomotive Services, Inc.'s lease with the Maryland PortAdministration that expired before Premier filed for bankruptcy.Finding that Premier's bankruptcy petition was filed in bad faith,Judge Schneider also lifted the automatic stay in Premier'sbankruptcy case, giving MPA officials the right to evict theDebtor.

Premier Automotive had a vehicle-processing center located at theDundalk Marine Terminal, a facility of the port of Baltimore thatis owned and managed by the Maryland Port Administration, anagency of the State of Maryland.

Premier Automotive occupied Lot 90 at the Terminal as a tenantsince 1964. The Debtor constructed a 27,500 square-foot buildingat the beginning of its occupancy.

On July 28, 1992, Premier and MPA entered into a written lease forLot 90. On July 1, 1997, Premier Automotive and the MPA renewedthe lease. Upon its expiration, the renewed lease provided thatPremier Automotive became a month-to-month tenant, and PremierAutomotive was required to remove any buildings it had erected, orwith the MPA's approval, to abandon the buildings to it.

The renewed lease terminated on June 30, 2002. On that date, theparties had not executed a new lease. Premier Automotive objectedto certain proposed terms contained in a new five-year leaseproposed by the MPA.

From 2002 through 2004, MPA proposed lease agreements to PremierAutomotive. Each time, the Debtor refused to accept the terms.

On March 29, 2005, the MPA requested that Premier Automotivevacate Lot 90 on or before May 1, 2005. On April 29, 2005,Premier Automotive filed for bankruptcy and sued the MPA (Bankr.D. Md. Adv. Pro. No. 05-1378). Premier's complaint against MPAsought an award of damages and an order compelling the MarylandPort Administration to execute a new lease.

The Debtor's schedules show it was solvent on the date of filing.The schedules did not indicate that the Debtor owed $17,045.08 tothe MPA. The schedules also showed that the Debtor had no securedcreditors. On Schedule G, the real property lease with MPA waslisted as "dated July 28, 1992, as amended from time to time,"indicating an executory contract or unexpired lease.

The situation was further aggravated because the MPA did notauthorize Premier Automotive to sublease Lot 401 from APS NorthTerminal, Inc. The MPA said that its reasons stemmed from PremierAutomotive's poor financial condition rather than its dispute withthe Debtor over Lot 90. Besides, the MPA said, it already madearrangements to lease Lot 90 to Pasha Automotive Services.

In a decision published at 2006 WL 1620304, Judge Schneider heldthat:

(a) the Bankruptcy Court has no authority to resuscitate a lease of real property that expired by its own terms prepetition;

(b) the Debtor had no cause of action against the MPA pursuant to the Bankruptcy Code's turnover provision to recover non-estate property;

(c) the MPA's refusal to approve the Debtor's sublease of one of its leased lots due, in part, to Premier's status as a debtor-in-bankruptcy did not violate the Code's anti-discrimination provision;

(d) the MPA, as the lessor of property subject to a lease that expired prepetition, was entitled to stay relief; and

(e) the Debtor filed its bankruptcy petition in bad faith, which warrants lifting the stay to permit the MPA to evict the Debtor.

REFCO INC: Judge Drain Extends Removal Period to September 13-------------------------------------------------------------The Honorable Robert D. Drain of the U.S. Bankruptcy Court for theSouthern District of New York extended, until September 13, 2006,the time within which Refco Inc. and its debtor-affiliatesmay file notices of removal pursuant to Rule 9006(b) of theFederal Rules of Bankruptcy Procedure.

As reported in the Troubled Company Reporter on June 28, 2006, theDebtors told the Court that the request has the consent of Marc S.Kirschner, the Chapter 11 trustee of the estate of Refco CapitalMarkets, Ltd.

Prior to filing for bankruptcy, the Debtors were plaintiffs inapproximately 37 actions and proceedings in a variety of stateand federal courts throughout the country.

Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher &Flom, LLP, in New York, relates that the Debtors have not yetreviewed all the Actions to determine whether any Actions shouldbe removed. The Debtors have continued to focus primarily onstabilizing and maximizing the value of the wind-down of theirbusinesses.

The RCM trustee also needs additional time to evaluate the Actionsto determine whether they should be removed.

Moreover, the Debtors and the RCM Trustee are engaged in abankruptcy plan formulation process, which may impact decisionswith respect to the Actions.

Ms. Henry asserts that extension of the Removal Period willafford the Debtors sufficient opportunity to assess whether theActions can and should be removed, thus, protecting the Debtors'valuable right to adjudicate lawsuits under 28 U.S.C. Section1452.

About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in14 countries and an extensive global institutional and retailclient base. Refco's worldwide subsidiaries are members ofprincipal U.S. and international exchanges, and are among the mostactive members of futures exchanges in Chicago, New York, Londonand Singapore. In addition to its futures brokerage activities,Refco is a major broker of cash market products, including foreignexchange, foreign exchange options, government securities,domestic and international equities, emerging market debt, and OTCfinancial and commodity products. Refco is one of the largestglobal clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & FlomLLP, represent the Debtors in their restructuring efforts. Luc A.Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, representsthe Official Committee of Unsecured Creditors. Refco reported$16.5 billion in assets and $16.8 billion in debts to theBankruptcy Court on the first day of its chapter 11 cases.

REFCO INC: Court to Consider Exclusive Period Requests on July 20-----------------------------------------------------------------The Hon. Robert D. Drain of the United States Bankruptcy Court forthe Southern District of New York adjourned, to July 20, 2006, thehearing to consider Refco Inc., and its debtor-affiliates' requestto extend their:

As reported in the Troubled Company Reporter on May 22, 2006, theCourt had previously set the hearing on June 27, 2006.

About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in14 countries and an extensive global institutional and retailclient base. Refco's worldwide subsidiaries are members ofprincipal U.S. and international exchanges, and are among the mostactive members of futures exchanges in Chicago, New York, Londonand Singapore. In addition to its futures brokerage activities,Refco is a major broker of cash market products, including foreignexchange, foreign exchange options, government securities,domestic and international equities, emerging market debt, and OTCfinancial and commodity products. Refco is one of the largestglobal clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & FlomLLP, represent the Debtors in their restructuring efforts. Luc A.Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, representsthe Official Committee of Unsecured Creditors. Refco reported$16.5 billion in assets and $16.8 billion in debts to theBankruptcy Court on the first day of its chapter 11 cases.

REFCO INC: 3 Parties Object to Ch. 11 Trustee's Skadden Retention-----------------------------------------------------------------As reported in the Troubled Company Reporter on July 5, 2006, MarcS. Kirschner, the Chapter 11 trustee of the estate of RefcoCapital Markets, Ltd., asked the U.S. Bankruptcy Court for theSouthern District of New York for authority to employ Skadden,Arps, Slate, Meagher & Flom LLP, as his special counsel.

Objections

(A) Wells Fargo

Wells Fargo Bank, National Association tells Judge Drain that itis not at all clear whether Skadden, Arps, Slate, Meagher & Flom,LLP, may provide legal advice to the Debtors' creditors,including those of the non-RCM Debtors, on matters that may beadverse to RCM, and whether the Other Refco Entities could act onthat advice to maximize recoveries for the parties to whom theyowe duties of loyalty.

Wells Fargo is the indenture trustee under an Indenture dated asof August 5, 2004, with respect to the 9% Senior SubordinatedNotes due 2012, aggregating $600,000,000.

Walter H. Curchack, Esq., at Loeb & Loeb LLP, in New York,asserts that if the role of the executives of the Other RefcoEntities will not include zealous advocacy solely for the non-RCMcreditors when conflict issues arise between RCM and the OtherRefco Entities, the Bankruptcy Court, at a minimum, must clarifywho will play that role for the benefit of those creditors andgive that party authority to act for the sole interest of theOther Refco Entities -- a privilege that, at this point, only theRCM creditors enjoy.

Specifically, Wells Fargo proposes that if Skadden is to beretained by the RCM Trustee, its role should be limited toadvising the RCM Trustee solely with respect to issues that arenot and do not have potential to be in conflict with theinterests of the Other Refco Entities.

Wells Fargo maintains that any order approving the SkaddenRetention should make clear that the allocation referred to inthe engagement letter is not binding on any party, will notcreate a presumption regarding cost-allocation for any purpose,and will remain subject to further Court order.

Wells Fargo cannot at this time take a position with respect tothe allocation methodology of Skadden's professional fees becausethe RCM Trustee has failed to disclose the rationale for thatallocation.

Moreover, Mr. Curchack notes that the Skadden engagement lettercontemplates that only the proposed fee committee may challengethe proposed allocation.

(B) Ad Hoc Committee

The Ad Hoc Committee of holders of the 9.0% Senior SubordinatedNotes due 2012, issued by Refco Finance, Inc., and Refco GroupLtd., LLC, contends that the Skadden Application is patentlyinappropriate and is not what the Court intended when itappointed the RCM Trustee.

Michael J. Sage, Esq., at Stroock & Stroock & Lavan LLP, in NewYork, points out that the Court indicated that the RCM Trusteeshould rely primarily on his own business and legal judgment andshould not hire an army of professionals.

Mr. Sage says the RCM Trustee's attempt to hire professionalswith undivided loyalty to RCM, and to systematically silence theestate-funded fiduciaries that may be adverse to RCM, indicatesthat the RCM Trustee is not interested in working toward a globalresolution of the RCM cases.

Mr. Sage notes that intercompany claims may well be thepreeminent issue in these cases. However, the RCM Trustee'sApplication provides that Skadden will not be permitted, withouta waiver from RCM, to represent the non-RCM Entities inlitigation against RCM with respect to intercompany claims.

Skadden will also provide services to the RCM Trustee withrespect to the BAWAG settlement and the SPhinX preference action,both of which will presumably include issues relating to theallocation of the recovered proceeds, according to Mr. Sage. Theallocation of the recovered proceeds from both the BAWAG and theSPhinX litigations will be hotly contested by all parties-in-interest in these cases and will likely involve issues thatrelate to intercompany claims. In the event the Application isgranted, Skadden would be precluded from taking positions thatare adverse to RCM with respect to the allocation of therecovered proceeds.

(C) Bank of America

Bank of America, N.A., the administrative agent for prepetitionsecured lenders, says the RCM Trustee is attempting to neutralizethe professionals representing the other Debtors estates. BofAnotes that those professionals are obligated to defend the rightsof the Debtors' creditors against RCM s attacks, and perhaps evento pursue offensive claims against RCM and its constituents.They cannot be required to obtain the permission of the RCMTrustee to do so.

"If these cases are about to degenerate into a litigationquagmire over intercompany and inter-creditor issues, then theother Debtors and their creditors are entitled to unconflictedrepresentation in this Court," Karen E. Wagner, Esq., at DavisPolk & Wardwell, in New York, tells Judge Drain.

According to Ms. Wagner, the provision in the engagement letter,which provides that Skadden will not to litigate against RCMwithout obtaining a waiver from the RCM Trustee, will leave theRefco Group Estates unrepresented with regard to key matters.

Ms. Wagner says the more appropriate resolution is to requirethat, rather than being preserved by the RCM Trustee, anyconflict will be waived, Ms. Wage says.

RCM Trustee Wants All Objections Overruled

"The [O]bjecting [P]arties have it all wrong," Timothy B.DeSieno, Esq., at Bingham Mccutchen LLP, in New York, tells JudgeDrain. "They ascribe to the [RCM] Trustee the Machiavellianmotive of 'conflicting out' the [o]ther Chapter 11 Debtors'professionals so that those professionals cannot be adverse tothe [RCM] Trustee."

Mr. DeSieno clarifies that what the RCM Trustee is really seekingto do is balance his many duties as trustee with cost concerns inaccordance with the Bankruptcy Court's order. Mr. DeSienoexplains that the conflicts issues raised by the ObjectingParties are illusory -- to the extent they exist, they alsoexisted before the appointment of the RCM Trustee.

Mr. DeSieno says that the RCM Trustee requires the advice andassistance of professionals to discharge his duties in RCM'scase, considering:

(a) the size and complexity of the RCM estate;

(b) the myriad issues in RCM's cases;

(c) the extensive fiduciary, management, reporting, and other responsibilities imposed on a Chapter 11 trustee; and

(d) the fact that RCM has no employees of its own.

According to Mr. DeSieno, it is not reasonable to expect that theRCM Trustee acting alone could discharge those statutory duties,much less also spend the innumerable hours he has spent strivingto achieve a resolution among the RCM constituencies as aprecursor to working out a global resolution of the Chapter 11Debtors' cases.

Mr. DeSieno argues that the Objecting Parties' primary suggestion-- that the RCM Trustee only informally consult other estates'and professionals without their having any responsibility to him-- is unworkable in view of the RCM Trustee's numerous and non-delegable responsibilities as a fiduciary in the RCM's case.

"Nor does it address the fact that the conflicts the ObjectingParties decry have always existed, and will continue to exist, inthese cases," Mr. DeSieno says.

Resolving substantial intercompany disputes and other mattersunderlying a global resolution of the RCM's cases are, and havealways been, central issues, well before the RCM Trustee'sappointment, Mr. DeSieno points out. The conflicting loyaltiesof the Professionals were born of different interests of creditorconstituencies, not because of the RCM Trustee's appointment.

Given that each of the Professionals is already performingservices for RCM, prevailing rules of professional responsibilityalready prohibit their being adverse to RCM, regardless ofwhether the RCM Trustee were to engage them.

About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in14 countries and an extensive global institutional and retailclient base. Refco's worldwide subsidiaries are members ofprincipal U.S. and international exchanges, and are among the mostactive members of futures exchanges in Chicago, New York, Londonand Singapore. In addition to its futures brokerage activities,Refco is a major broker of cash market products, including foreignexchange, foreign exchange options, government securities,domestic and international equities, emerging market debt, and OTCfinancial and commodity products. Refco is one of the largestglobal clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & FlomLLP, represent the Debtors in their restructuring efforts. Luc A.Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, representsthe Official Committee of Unsecured Creditors. Refco reported$16.5 billion in assets and $16.8 billion in debts to theBankruptcy Court on the first day of its chapter 11 cases.

REMEDIATION FINANCIAL: Has Until Aug. to File Disclosure Statement------------------------------------------------------------------The Honorable Charles G. Case, II, of the U.S. Bankruptcy Courtfor the District of Arizona gave Remediation Financial, Inc., andits debtor-affiliates until August 14, 2006, to file an amendeddisclosure statement.

The Debtors filed their Disclosure Statement and Joint Plan onJan. 28, 2005. The Plan implements two major agreements enteredby the Debtors in their bankruptcy proceedings:

a) the Debtors' Settlement Agreement with Zurich American Insurance Company and certain of its affiliates, dated Dec. 22, 2004, and

The Plan groups claims against and interests in RemediationFinancial into four classes. Unimpaired claims consist of OtherPriority Claims, totaling $4,800, which will be paid in full onthe Effective Date.

Impaired Remediation Financial Claims consist of:

a) Non-Insider Unsecured Claims, to receive a Pro Rata portion of the proceeds of the sale of the unencumbered assets of Bermite Recovery LLC, after the payment in full of all Priority Claims;

b) Insider Unsecured Claims, to receive their Pro Rata distribution of all remaining proceeds of the Remediation Financial Unencumbered Property only upon the full payment of Class 1 and Class 2 claims; and

c) Equity Interests, which Myla Bobrow will retain following Plan's confirmation subject to the terms of a Voting Trust under the Plan.

Debtor-affiliates RFI Realty, Inc., Santa Clarita, L.L.C., andBermite Recovery L.L.C., have their own groups of claims andinterests under the Plan and their respective treatments arespecified under the Plan.

Full-text copies of the Disclosure Statement and Joint Plan areavailable for a fee at:

The Court also extends the period within which only theDebtors can solicit acceptances to any chapter 11 plan throughSept. 5, 2006. On that date, the Court will consider furtherextending the exclusive solicitation period.

The deadline for objections to the Debtors' Disclosure Statementis extended to September 12, 2006. The Court will considerapproval of the Disclosure Statement on Sept. 19, 2006.

At the same time, the rating agency affirmed all of its ratingson the company, including the 'B+' corporate credit rating.

The outlook revision reflects Standard & Poor's expectation thatRockwood's financial profile should continue to strengthen,primarily through gradual earnings improvement, to a level thatwould warrant a slightly higher rating during the next 18 to 24months.

"Earnings are expected to trend upward because of favorable marketprospects, moderate organic sales growth, and close attention tooperating costs. However, the company's high debt leverage andour expectation that it will continue to pursue modest-sizeacquisitions will likely limit the amount of cash available fordebt reduction," said Standard & Poor's credit analyst CynthiaWerneth.

The ratings on Princeton, New Jersey-based Rockwood reflect ahighly leveraged financial profile, which overshadows anattractive portfolio of specialty chemical businesses with annualsales of about $3 billion.

Operations are organized into these seven business areas of whichmanagement considers the first four to be core:

* Advanced ceramics (ceramic materials used in medical, electronics, and other applications);

* Groupe Novasep (synthesis of pharmaceutical intermediates);

* Specialty compounds (specialty compounds for wire and cable); and

* Electronics (electronic chemicals and photomasks).

Rockwood benefits from well-established business positions, with asignificant portion of sales in products with leading niche marketshares. The firm's diverse end markets, product range, andtechnology platforms lend stability to earnings and cash flowgeneration, tempering the cyclical swings in larger end markets,such as electronics and construction. A focus on technology-basedproducts underpins value-added pricing.

In addition, favorable long-term business fundamentals in keyproduct lines should aid cash flow generation. The company'scredit quality is supported by a broad customer base andmeaningful geographic diversity, with about two-thirds of salesoutside the U.S. A global network of manufacturing facilitiesprovides a platform to expand product sales internationally.

The credit facility can be increased by up to $75 million, inincrements of $25 million, under certain circumstances and subjectto certain conditions, including the receipt from one or morelenders of the additional commitment.

Amounts outstanding under the credit facility generally bearinterest at the prime rate or Libor plus a specified margin,depending on the type of borrowing being made. The applicablemargin is based on the Company's consolidated ratio of net debt toadjusted EBITDA from time to time. Currently, the Company's marginis 0.0% for prime rate loans and 1.0% for Libor rate loans.

Amounts outstanding under the credit facility are generally dueand payable on the expiration date of the credit agreement on June24, 2011. The Company can elect to prepay some or all of theoutstanding balance from time to time without penalty.

The credit agreement requires the Company to comply with variouscovenants, including among other things, financial covenants tomaintain:

-- From the closing date through March 31, 2007 a ratio of consolidated net debt to adjusted EBITDA not to exceed 3.5 to 1 and from June 30, 2007 a ratio of consolidated net debt to adjusted EBITDA not to exceed 3.25 to 1.

-- A consolidated fixed charge coverage ratio not to exceed 1.5 to 1

The credit agreement allows the Company to, among other things,make distributions to shareholders, repurchase its stock, incurother debt or liens, or acquire or dispose of assets provided thatthe Company complies with certain requirements and limitations ofthe credit agreement.

The Company's obligations under the credit agreement are securedby a pledge of substantially all of Roller Bearing and RBCBearings' assets and a guaranty by RBC Bearings of RollerBearing's obligations.

On June 26, 2006, the Company borrowed approximately $79 millionunder the revolving credit facility and used the funds, to payfees and expenses associated with the new credit facility andrepay the approximately $78 million balance outstanding under theCompany's old credit facility.

The Company terminated its Fifth Amended and Restated CreditAgreement with certain lenders and General Electric CapitalCorporation following the repayment of approximately $78 millionterm loan outstanding under the facility.

Headquartered in Oxford, Connecticut, RBC Bearings Incorporated -- http://www.rbcbearings.com/-- is an international manufacturer and marketer of highly engineered precision bearings andcomponents. Founded in 1919, the Company is primarily focused onproducing highly technical or regulated bearing products requiringsophisticated design, testing, and manufacturing capabilities forthe diversified industrial, aerospace and defense markets. RBCBearings currently employs approximately 1,700 people in 18facilities located throughout North America and Europe.

* * *

Moody's Investors Service assigned a B2 Corp. Family Rating, B3issuer rating and a Caa1 subordinated debt rating to RollerBearing in March 2004.

SERACARE LIFE: Wants Plan-Filing Period Stretched to October 18---------------------------------------------------------------SeraCare Life Sciences, Inc., asks the U.S. Bankruptcy Court forthe Southern District of California to extend the period withinwhich it has the exclusive right to file a chapter 11 plan toOct. 18, 2006. The Debtor also asks the Court to extend theperiod within which it has the exclusive right to solicitacceptances for any chapter 11 plan to Dec. 18, 2006.

As reported in the Troubled Company Reporter on July 6, 2006, anAd Hoc Committee of Equityholders, holding around 28.5% of theDebtor's outstanding shares, asked the Court to terminate theDebtor's exclusive periods after negotiations on a proposedfinancing failed.

Thomas E. Patterson, Esq., at Klee, Tuchin, Bogdanoff & Stern,in Los Angeles, California, told the Court that the Debtor hasfailed to hold its annual meeting of shareholders for over15 months, the maximum interval permitted by California law.Mr. Patterson disclosed further that, recently, the Debtorinformed the Ad Hoc Committee that the Debtor is no longer beingmanaged by the Debtor's board of directors, but is rather beingcontrolled by a special committee that had been "delegated all ofthe powers of the Board."

Paul J. Couchot, Esq., at Winthrop Couchot, P.C., contends thatthere is more than some promise of success for reorganization inthe Debtor's case. The Debtor has substantial equity in itsassets and the financial ability to reorganize. The Debtor hasbeen current on its vendor and trade claims since filing forbankruptcy. In fact, the bankruptcy petition itself wasprecipitated by a technical default, rather than an actualmonetary default, under its credit agreement with its seniorsecured lenders.

The Debtor's case is relatively large and complex, Mr. Couchotpoints out. The Debtor is a publicly held entity. Until recently,its shares were actively traded on the NASDAQ National Market.The Debtor has approximately 240 employees, and its annualizedrevenues for fiscal year 2005 ending Sept. 30, 2005, wereapproximately $55 million. Mr. Couchot insists on the necessityof sufficient time to permit the Debtor to negotiate a plan ofreorganization. The Debtor's case involves numerous activeparties and constituencies including the senior secured Lenders,the subordinated lenders, Official Committee of Creditors, the AdHoc Committee, etc. Given the number of active constituencies inthis case, additional time is needed to formulate a chapter 11plan.

The Debtor recently obtained Court approval of a four-month cashcollateral stipulation that will result in full repayment of itsterm loan with the senior secured lenders. The Debtor is now in aposition to negotiate with all constituencies, Mr. Couchot argues.

Based in Oceanside, California, SeraCare Life Sciences, Inc. --http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercialbioproduction of therapeutic drugs, and medical research. TheCompany filed for chapter 11 protection on March 22, 2006(Bankr. S.D. Calif. Case No. 06-00510). The Official Committee ofUnsecured Creditors selected Henry C. Kevane, Esq., and Maxim B.Litvak, Esq., at Pachulski Stang Ziehl Young Jones & WeintraubLLP, as its counsel. When the Debtor filed for protection fromits creditors, it listed $119.2 million in assets and$33.5 million in debts.

SILICON GRAPHICS: Taps Financial Balloting as Voting Agent----------------------------------------------------------In contrast with cases where public securities do not play aprominent role, the solicitation process for Silicon Graphics,Inc., and its debtor-affiliates will be significantly morecomplex, Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, inNew York, tells the U.S. Bankruptcy Court for the SouthernDistrict of New York.

Because proper notice to, and tabulation of the votes of, theholders of Silicon Graphics' public securities is critical, theDebtors seek the Court's authority to employ Financial BallotingGroup LLC, as their voting agent.

Mr. Waisman asserts that FBG is uniquely qualified to act asvoting agent in the Debtors' Chapter 11 cases as FBG is familiarwith the applicable procedures and has a specialty practice inbankruptcy solicitations involving publicly held securities.

According to Mr. Waisman, FBG:

-- has employees experienced in all areas pertaining to the identification and solicitation of holders of securities;

-- has a state-of-the-art mailing facility; and

-- is highly experienced in dealing with the back offices of the various departments of banks and brokerage firms.

Mr. Waisman adds that FBG's Jane Sullivan, Esq., who would beprimarily responsible for handling the Debtors' notices, has (i)more than 20 years of experience in public securitiessolicitations and other transactions, (ii) specialized inbankruptcy solicitations since 1991, and (iii) worked on more than100 bankruptcy solicitations including Footstar, WorldCom, andEnron.

As Voting Agent, FBG will:

(a) assist with tabulation of votes of creditors in connection with the confirmation process of the Debtors' First Amended Joint Plan of Reorganization;

(b) act as subscription agent in connection with the Rights Offering; and

(c) coordinate the distribution of any notices required as part of the Plan confirmation process to the creditors and to equity interest holders by forwarding the appropriate documents to the Voting Nominees.

In exchange for its services, FBG will be paid:

* a $20,000 project fee plus $2,000 for each issue of public securities entitled to vote on the Plan; $3,000 for each issue of public securities entitled to vote on the Plan and participate in the rights offering; $1,500 for each debt issue not entitled to vote on the Plan but entitled to receive notice; $10,000 for the common stock if it is entitled to vote; and $5,000 for the common stock if it is not entitled to vote but entitled to receive notice;

* labor charges for the mailing to registered record holders of securities and any other creditors which the Debtors ask FBG to serve, estimated at $1.75 to $2.25 per package, depending on the complexity of the mailing, with a $500 minimum charge for each file;

* a minimum charge of $2,000 for up to 250 telephone calls from security holders and other creditors within a 30-day solicitation period. Additional calls will be charged at $8.00 per call. Any calls to security holders or other creditors will be charged at $8.00 per call;

* a charge of $125 per hour for the tabulation of ballots and master ballots, plus set-up charges of $1,000 for each tabulation element;

* to the extent requested by the Debtors, $6,500 for notice mailings to beneficial holders of debt securities held in street name. Mailings to registered holders of securities will be charged at a rate of $0.50 to $0.65 per holder, with a $250 minimum.

Ms. Sullivan assures the Court that her firm has no connectionwith, and holds no interest adverse to, the Debtors, theircreditors, or any other party-in-interest. FBG is a"disinterested person," as defined in Section 101(14) of theBankruptcy Code, Ms. Sullivan says.

SILICON GRAPHICS: Gets Okay to File Customer Lists Under Seal-------------------------------------------------------------Silicon Graphics, Inc., and its debtor-affiliates sought andobtained the U.S. Bankruptcy Court for the Southern District ofNew York's authority to file portions of:

1. their schedules of assets and liabilities, schedule of executory contracts and unexpired leases, statement of financial affairs, and list of equity holders; and

2. any affidavits of service, which may be filed in connection with the Debtors' request to establish a bar date for the filing of proofs of claim,

that contain lists of their customers, under seal for in camerareview.

Schedule G of the Schedules requires the Debtors to provide acustomer list. The Debtors also anticipate that they may need toprovide notice of the claims bar date to some or all of theparties on the Customer Lists.

As with nearly every company, and particularly in the high-techsector, the identity of the customers on SGI's Customer Lists isone of SGI's most closely guarded secrets, Gary T. Holtzer, Esq.,at Weil, Gotshal & Manges LLP, in New York, explains. TheDebtors' Customer Lists constitute proprietary trade secrets andare among the Debtors' most valuable assets.

Mr. Holtzer contends that filing the Customer Lists on the publicdocket would compromise one of the Debtors' most significantassets, and negatively impact their reorganization prospects.

If the Lists are made public, the Debtors' competitors would get aclear picture of who the Debtors' customers are, the locationswithin the customer's operations where they interface with theDebtors, and an insight into the scope and type of work theDebtors and the customers are engaged in. "This would enable thecompetitors to strategically target the Debtors' major customersand attempt to secure them as their own," Mr. Holtzer says.

STEELCASE INC: Earns $18.2 Million in First Quarter Ended May 26----------------------------------------------------------------Steelcase Inc. reported revenue totaling $727.3 million for itsfirst quarter ended May 26, 2006. Revenue increased 7.6 percentcompared to $676 million in the prior year. First quarter revenueincludes $5.4 million from acquisitions and $4.8 million fromcurrency translation effects, compared to the prior year.

For the three months ended May 26, 2006, the company earned netincome of $18.2 million, compared to net income of $6.7 million inthe prior year.

First quarter results include restructuring charges of $2.7million after-tax. Charges were primarily related to facilityrationalizations in the company's International and North Americasegments. Prior year restructuring charges totaled $6.8 millionafter-tax.

"We see plenty of evidence that our company's positive momentum iscontinuing," said James P. Hackett, president and CEO. "Inaddition to our solid first-quarter performance, we successfullylaunched the Nurture healthcare brand and won six product awardsat NeoCon."

Cost of sales, which does not include restructuring charges, was69.2 percent in the first quarter, similar to the prior year.Improved pricing yield and the benefits of prior restructuringactions helped offset higher material costs and lower margins incertain product categories.

Gross margin was 30.3 as a percent of sales compared to 29.5percent last year. The improvement was driven by lowerrestructuring costs.

Steelcase reduced operating expenses as a percent of sales to 26.4percent from 27 percent in the prior year. This improvement wasrelated to continued cost control and leverage from higher salesvolume.

Reported operating income was $28 million or 3.9 percent ofrevenue, and includes pre-tax restructuring charges of $(4.3)million. Operating income without restructuring charges was $32.3million or 4.4 percent of revenue, compared to $26 million or 3.8percent of revenue, in the prior year.

Other income was $4.9 million compared with $800,000 in the prioryear. The increase is primarily a result of higher interestincome and gains on currency derivatives.

Total cash and cash equivalents were $386.3 million at the end ofthe first quarter, down from $423.8 million at the end of fiscal2006 due to normal seasonal disbursements associated with bonuspayments and retirement plan contributions. Total debt was $255.3million compared to $264 million at the end of fiscal 2006.

"The year is off to a good start with revenue and incomeconsistent with our estimates. Over the next few quarters we willbe implementing the final stages of the North Americarestructuring plan, and we will be working to improve gross marginperformance in some specific areas," said James P. Keane, chieffinancial officer.

Headquartered in Grand Rapids, Michigan, Steelcase, Inc. (NYSE:SCS) -- http://www.steelcase.com/-- designs and manufactures architecture, furniture and technology products. Founded in 1912,Steelcase serves customers through a network of more than 800independent dealers and approximately 13,000 employees worldwide.

TEKELEC: Restates Quarterly Reports for 2005 and 2004------------------------------------------------------Tekelec filed with the Securities and Exchange Commission itsquarterly reports on Form 10-Q/A for the three months endedMarch 31, 2005, June 30, 2005, and Sept. 30, 2005, in which itrestates its previously issued consolidated financial statementsfor each of the quarters during the nine months ended Sept. 30,2005, and 2004.

The restated unaudited results for each of the three quarters inthe nine months ended Sept. 30, 2005, and 2004 had previously beendisclosed in summary form in Note 18 of the Notes to theConsolidated Financial Statements in the Company's Annual Reporton Form 10-K for the year ended Dec. 31, 2005.

Tekelec expected that it will file on July 12, 2006, its FirstQuarter 2006 Form 10-Q and has scheduled a conference call on thatdate for senior management to discuss first quarter results. TheCompany also plans to discuss during this call and to provide onits web site prior thereto historical non-GAAP numbers for each ofthe quarters in 2004 and 2005, the full years 2004 and 2005 andthe first quarter of 2006.

With the filing of the First Quarter 2006 Form 10-Q, the Companybelieved that it will have met all the conditions set by a NasdaqListing Qualifications Panel for the continued listing of theCompany's Common Stock on the Nasdaq National Market System, whichconditions require that the Company file with the Commission, onor before July 17, 2006, its 2005 Form 10-K, all requiredrestatements and the First Quarter 2006 Form 10-Q.

The Company also reported that it expects to timely file itsQuarterly Report on Form 10-Q for the three months ended June 30,2006.

Events of Default

In June 2003, the Company issued and sold $125 million aggregateprincipal amount of its 2.25% Senior Subordinated ConvertibleNotes due June 15, 2008.

The Indenture governing the Notes obligates the Company to provideDeutsche Bank Trust Company Americas, the Notes' Trustee withdocuments and reports as are required to be filed with theSecurities and Exchange Commission.

Because of the delayed filing of the Company's Annual Report forthe year ended Dec. 31, 2005, with the SEC, the Company received anotice of default on April 1, 2006, from holders of more than 25%of the outstanding principal amount of the Notes.

Because the Company filed its Annual Report with the SEC on May30, 2006, the Company said that neither the Trustee nor theholders have the right to accelerate the Notes since it filedwithin the 60-day cure period.

The Company also failed to timely deliver its quarterly report forthe quarter ended March 31, 2006, to the SEC and to the Trustee onbefore May 25, 2006, which resulted in an additional default underthe Indenture.

The Company said that if the default is not cured or waived within60 days after any notice of default is delivered by the Trustee orby the holders of the Notes, the Trustee or holders of the Noteshave the right to accelerate the payment of indebtedness under theIndenture.

The Company expects to file its first quarter report on or beforeJuly 17, 2006. The filing will be able to cure this default underthe Indenture, the Company said.

The Indenture also provides that if the Company's common stockceases to be listed on the Nasdaq National Market, that constitutean event of default.

Nasdaq Delisting

The company received, on March 20, 2006, a notice from The NasdaqStock Market indicating that the Company's common stock is subjectto potential delisting from the Nasdaq National Market as a resultof its failure to comply with Marketplace Rule 4310(c)(14).

This listing standard requires the Company to timely file allreports with the Securities and Exchange Commission, as requiredby the Securities Exchange Act of 1934, as amended.

The Company intends to request a hearing before a Nasdaq ListingQualifications Panel for review of the delisting determination.This request will automatically stay the delisting of theCompany's common stock pending the Panel's review and decision.

The Company's common stock will continue to trade on the NasdaqNational Market until the Panel issues a decision and anyexception granted by the Panel expires.

The Company reported that as part of its restructuring andoperational review, Mr. Patty visited the Busan plant on June 27,2006. Upon Mr. Patty's arrival, the office manager advised himthat Mr. Lim Chul Jin, president of Thomas Equipment Asia, and allworkers had quit as a sign of solidarity and support for therecently terminated President of the Company, Clifford Rhee.Including the office manager, four former employees of the Companywere on the premises upon Mr. Patty's arrival. The Company saidthat Mr. Patty was further advised that if certain undefinedconditions were met, all the workers would immediately return towork.

The Company further disclosed that on June 28, 2006, David M.Marks, Chairman of the Company, received a facsimile of a letterdated June 26, 2006 from Mr. Lim Chul Jin, terminating hisemployment with the Company and its subsidiaries.

The Company reported that it has been advised by Mr. Rhee that theworkers would return to its Busan plant if certain demands of Mr.Lim Chul Jin were met. The Company's senior management howeverdeclined to have any such discussions or negotiations with Mr. LimChul Jin regarding the resumption of operations in the Busan plantgiven their recommendation to close that manufacturing facility.

Mr. Patty also recommended:

1. In an orderly fashion, the Company sell its finished goods located in Busan, South Korea;

2. The Company relocate certain of its other intellectual and capital assets to its plant in Centreville, New Brunswick, Canada; and

3. The Company or its agent proceed to sell its land and improvements in Busan, South Korea and apply the proceeds, net of any financial costs and charges from the closure, to reduction of its senior debt with Laurus Master Funds, Ltd. In connection with its recent financing with Laurus, the Company perfected Laurus' security interest in all of its assets in South Korea.

Mr. Patty says that these recommendations reflect his and thesenior managements team's agreement on the steps necessary torestructure and make the Company successful and theserecommendations had nothing to due with the actions of Mr. LimChul Jin or Company's former workers in Busan.

About Thomas Equipment

Headquartered in Milwaukee, Wisconsin, Thomas Equipment, Inc. --http://www.thomas-equipment.com/-- is a technologically advanced global manufacturer of a full line of skid steer and mini skidsteer loaders as well as attachments, mobile screening plants andsix models of mini excavators. The Company distributes itsproducts through a worldwide network of distributors andwholesalers. In addition, the Company's wholly owned subsidiariesmanufacture specialty industrial and construction products, acomplete line of potato harvesting and handling equipment, fluidpower components, pneumatic and hydraulic systems, spiral woundmetal gaskets, and packing material.

Cook County Lumber Company $100,667200 East 130th StreetChicago, IL 60628-6901

Okaw Truss, Inc. $101,721368 East Street, Route 133Arthur, IL 61911

Carolina Stair Supply $96,958

Old World Mill Works $70,622

Robbins Manufacturing $59,563

Charles J. Gries & Company $50,460

Kane County Collector $33,544

Spartan Forest Products, Inc. $31,099

Sierra Forest Products $29,202

Pawnee Leasing $25,688

Carlos Perez Wages $24,140

Frank Paxton Lumber Co., LLC $20,708

Art Benton Wages $20,263

Bluelinx $19,105

Wasserman & Associates, Inc. $18,675

Cardunal Financial Insurance $16,813

TOWER AUTOMOTIVE: C&E Sales Wants Decision on Agreement-------------------------------------------------------C & E Sales, Inc., asks the U.S. Bankruptcy Court for the SouthernDistrict of New York to compel Tower Automotive, Inc., and itsdebtor-affiliates to either assume or reject the executorycontract entered into by C&E and the Debtors.

On March 17, 2001, Tower Automotive and C&E Sales entered into anagreement under which C&E agreed to provide consignment inventoryof parts and maintenance of a parts crib at Tower's Bardstown,Kentucky facility.

On September 15, 2004, the agreement was modified to provide forthe placement of vending machines owned by Turck, Inc., at theBardstown facility instead of maintaining a parts crib. Theinventory contained in the machines was still owned, andcontinues to be owned, by C&E.

David E. Larson, Esq., at Altick & Corwin, Co., L.P.A., inDayton, Ohio, relates that C&E has continued to service themachines, monitor usage, replenish parts, and maintain accountspursuant to the agreement to the present day.

C&E wants the agreement either to be assumed or rejected so thatit can either adequately plan for continued service, or arrangeto discontinue service and submit a proof of claim for theaccount receivable due on February 2, 2005.

TOWER AUTOMOTIVE: Judge Gropper Denies Committee's Stay Request---------------------------------------------------------------The Honorable Allen Gropper of the U.S. Bankruptcy Court for theSouthern District of New York holds that the Official Committee ofUnsecured Creditors appointed in Tower Automotive, Inc., andits debtor-affiliates' chapter 11 cases, failed to satisfy any ofthe criteria necessary for the court to grant a stay pending aruling on the Committee's appeal of the order dated May 22, 2006,approving settlement agreements between the Debtors, the MilwaukeeUnions and the Official Committee of Retired Employees.

"The Committee's request for a stay is denied," Judge Gropperdeclares.

Judge Gropper says the Committee's arguments in support of itsposition that it is "likely to prevail on appeal" are the samearguments made in the Committee's objection to the Settlements --which the Court has already dealt with.

According to Judge Gropper, the Committee failed to:

-- understand Section 1114 of the Bankruptcy Code;

-- understand the fact that retirees are not similarly situated to general unsecured creditors;

-- acknowledge that the appeal is from the approval of a compromise, which Section 1114 was designed to foster.

The Committee will have to show on appeal that approval of theSettlements was "manifestly erroneous and a clear abuse ofdiscretion," Judge Gropper maintains. "The Committee does noteven try to demonstrate that it can satisfy this burden," headds.

Irreparable Harm

The Court holds that the Committee does not explain how asettlement with the retirees will irreparably harm theCommittee's negotiation of a plan of reorganization.

The Court further holds that Committee has not made any attemptto demonstrate that (i) giving the retirees a guaranteed recoveryis any more "prejudicial" than paying them cash, and (ii) itcould not negotiate a plan of reorganization in the face ofconsummated settlements with the retirees.

By contrast, Judge Gropper says, a stay would significantly harmthe Debtors and the retirees. The timing of the termination ofthe Debtors' prior obligation to provide retiree health benefitsis a critical component of the Settlements. Any delay wouldundermine effectuation of the Settlements, Judge Gropperexplains.

Also, a grant of the stay would complicate the Debtors' ongoingefforts to secure exit financing, which in turn, would hinder theDebtors' efforts to emerge from bankruptcy. This prospect wouldharm all parties-in-interest, Judge Gropper says. The publicinterest would also be adversely affected.

The Court notes that the Settlements brought to a close a complexnegotiation process. To freeze or undo the Settlements at thispoint might require the Debtors, the Retiree Committee and theMilwaukee Unions to start the time-consuming Section 1114 processagain, and would disrupt ongoing Section 1113 negotiations andthe Debtors' ability to resolve other major issues in the Chapter11 cases.

"In light of all of the prior proceedings, which the Committeesupported, it is highly inequitable for the Committee now tocontend that a settlement is premature and should be put onhold until a plan is negotiated," Judge Gropper maintains.

Judge Gropper notes that the Committee's position is particularlyinequitable in view of the fact that it delayed seeking a stayuntil the eve of consummation of a settlement that has beenprojected for months.

TRUMP ENTERTAINMENT: Suspends Casino Operations in Atlantic City----------------------------------------------------------------Twelve casinos in Atlantic City, New Jersey could reopen onJuly 7, 2006, after the New Jersey legislators agreed on a statebudget, The Wall Street Journal reports.

Trump Entertainment Resorts, Inc., has been forced to suspendgaming operations starting 8:00 a.m. on July 5 at its threecasino hotels -- Trump Taj Mahal, Trump Marina and Trump Plaza -- as a result of the inability of the New Jersey legislature topass a budget, and in response to an order from the New JerseyCasino Control Commission.

In a filing with the U.S. Securities and Exchange Commission,Trump said that its non-union employees in the affected areas ofoperations will be given the option to use accumulated vacationand paid time off, or take time off without pay. Union employeeswill be treated in a manner consistent with their negotiatedcontracts but generally will be off without pay until gamingoperations resume.

"We are pleased to announce the closing of this transaction andwelcome the Celerica employees into the Unity Wireless family,"Ilan Kenig, President and CEO of Unity Wireless, commented. "Weare looking forward to completing our strategic acquisition plan,previously announced May 16, 2006, over the next several weeks andpresenting a much stronger company to our market."

The acquisition of Celerica brings to Unity Wireless a unique lineof coverage enhancement solutions that are being used today byoperators of UMTS 3G networks in Europe and Asia. Often referredto in the industry as "distributed antenna systems" or "remote RFheads" mainly utilizing unlicensed free space optics and 5.8Ghzmicrowave links, these systems allow operators to cost-effectivelyexpand their coverage footprint by remotely distributing thecapacity of centrally located base stations. In addition, severalelements within the Celerica product lines are also marketable asstand-alone products.

"As a result of this transaction, we are seeing the potential ofsignificantly increasing our opportunities with existingcustomers," Nissim Atias, CEO of Celerica Ltd, commented. "We arevery excited about this transaction and looking forward to play arole in a much bigger organization."

Celerica had audited 2005 revenues of $2.2 million, a loss of$6.1 million, and had positive net assets of $2.9 million atDec. 31, 2005. The company has had the backing of aninternational group of venture capital investors whose investmentsin the development of Celerica's coverage enhancement productsexceeded $30 million.

"Restructuring Celerica is somewhat complete and the capitalburn-rate that existed prior to our transaction has been reducedsignificantly," Dallas Pretty, CFO of Unity Wireless, added." As we have said previously, the transactions currently underwayare expected to create greater economies of scale across theentire operations infrastructure and are pleased with our effortsmade so far."

Terms of the acquisition were unchanged from the initial termsreported on Feb. 10, 2006 whereby Unity Wireless acquired CelericaLtd. for preferred shares that upon conversion will represent 20million shares of common stock.

KPMG LLP expressed doubt about Unity Wireless' ability to continueas a going concern after auditing the Company's 2005 financialstatements. The auditing firm pointed to the Company's recurringlosses from operations.

At March 31, 2006, the Company's balance sheet showed $5.1 millionin total assets and $6.6 million in total liabilities, resultingin a $1.4 million stockholders' deficit.

VENTAS INC: Taps J. Tellatin as Appraiser in Reset Right Process----------------------------------------------------------------Ventas, Inc. selected James K. Tellatin, MAI, the foundingprincipal in Tellatin, Short & Hansen, Inc., as its appraiser forthe Reset Right process under each of its four Master Leases withits tenant Kindred Healthcare, Inc. (NYSE: KND).

"We have been working with Jim for over a year as one of ourprincipal advisors regarding the fair market rental of our 225healthcare assets leased to Kindred," Ventas Chairman, Presidentand CEO Debra A. Cafaro said. "He is respected for hisindependence, as well as his specialized expertise and extensiveexperience in valuing healthcare real estate. Jim has served asan expert witness and written authoritative pieces on thevaluation of healthcare real estate."

"We have surrounded ourselves with industry experts inanticipation of the Reset Right process so that, in the exerciseof our fiduciary duties and best judgment, we benefit from theadvice of skilled and experienced professionals. That includesMr. Tellatin, who has completed fair market rental analyses of allthe assets in our portfolio," Ms. Cafaro added. "Our proposal toincrease Kindred's annual base rent to $317 million and reset ourannual escalation to 3 percent is based upon the input of Mr.Tellatin and other professional appraisers, the terms of theMaster Leases, comparable recent transactions and our ownextensive knowledge of the rental market for healthcare realestate facilities."

"We continue to believe that another tenant operator would bewilling to pay at least $317 million to rent our 225 healthcarefacilities on a fully licensed basis under the existing MasterLeases because that tenant operator would make a significantprofit from our facilities and incur a limited capital outlay tocontrol a high-quality and extremely valuable platform for thenext 17 to 22 years," Ms. Cafaro explained.

Ventas also stated that Kindred selected Edwin W. Litolff, Jr.from American Appraisal Associates as its appraiser for the ResetRight process.

Mr. Tellatin's Credentials

Mr. Tellatin, Ventas's designated appraiser, is a member of theAppraisal Institute, holding the MAI designation. Since startinghis firm in 1984, he has specialized in the valuation of nursingfacilities, hospitals, assisted living facilities and seniorhousing developments.

His extensive background validates Mr. Tellatin's reputation as anauthority on healthcare real estate valuations. He has preparedappraisal reports for courts and boards, testified as an expertwitness in many cases involving nursing facilities and authorednumerous works on healthcare real estate valuation. In addition,he has developed the on-line version of The Appraisal of NursingFacilities for the Appraisal Institute, where he is the soleinstructor, approved in over 30 states.

The Reset Right Process

The Reset Right process outlined in the Master Leases gives Ventasthe right to increase base rental rates on the 225 healthcarefacilities it leases to Kindred to "Fair Market Rental" levels.On May 9, Ventas initiated the Reset Right process by deliveringnotices to Kindred with its proposal that aggregate base rentsunder the Master Leases increase by $111 million to $317 millionper year. Because Ventas and Kindred did not reach an agreementon Fair Market Rental for the Ventas facilities within thestipulated time period, each company had a second period todesignate its appraiser.

Mr. Tellatin and the Kindred appraiser now have 10 days to agreeon the selection of a third appraiser who meets the qualificationsunder the Master Leases. If the companies' two appraisers are notable to agree on a Third Appraiser within that time, the partiesmay seek the appointment of an independent expert to determineFair Market Rental and the annual escalation for the facilities.Once the Third Appraiser is selected, that person will have 60days to complete its work. Ventas can then choose, on a MasterLease by Master Lease basis, whether to opt into the ThirdAppraiser's new rental and escalation schedule, or retain itsexisting annual cash rentals and 3.5% annual rent increase.Ventas's current annual cash rent is $206 million.

The determination of the Fair Market Rental under the Reset Rightis dependent on and may be influenced by a variety of factors,including market conditions, reimbursement rates, and cash flow torent coverages applicable to healthcare facilities. It is highlyspeculative, and there can be no assurances (and Ventas isexpressing no views) regarding the final determination of the FairMarket Rental. If Fair Market Rental is determined by theappraisal process in the Master Leases, it is subject to theinherent risks, uncertainties, subjectivity and judgment containedin any appraisal process. A Third Appraiser's determinationregarding Fair Market Rental amounts or escalations for Ventas's225 healthcare facilities that are covered by the Master Leasescould materially differ from Ventas's estimates, analyses orproposals.

About Ventas

Headquartered in Louisville, Kentucky, Ventas, Inc. (NYSE:VTR) -- http://www.ventasreit.com/-- is a healthcare real estate investment trust that is the nation's largest owner of seniorshousing and long-term care assets. Its portfolio of propertieslocated in 42 states includes independent and assisted livingfacilities, skilled nursing facilities, hospitals and medicaloffice buildings.

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As reported in the Troubled Company Reporter on June 5, 2006,Moody's Investors Service changed the rating outlook for Ventas,Inc. to positive. This rating action results from Ventas' recentrefinancing of its bank facility from a secured facility to anunsecured facility, once again demonstrating the REIT's commitmentto balance sheet enhancement.

In its previous rating action with respect to Ventas, Moody'supgraded the senior debt rating to Ba2 with a stable outlook.

WELLMAN INC: S&P Affirms B+ Rating & Revises Outlook to Negative----------------------------------------------------------------Standard & Poor's Ratings Services revised its outlook on WellmanInc. to negative from stable. At the same time, Standard & Poor'saffirmed all ratings on the company, including its 'B+' corporatecredit rating.

"The outlook revision reflects our expectation for a challengingoperating landscape as a result of elevated raw material costs andmeaningful capacity additions in the polyethylene terephthalateresin market in the U.S.," said Standard & Poor's credit analystPaul Kurias.

In the near term, Wellman's profitability in both the PET segmentand the polyester staple fiber segment is likely to be negativelyaffected by elevated raw material costs and limited pricing power.

The ratings on Shrewsbury, New Jersey-based Wellman reflect a weakbusiness profile that recognizes the company's leading positionsin the fragmented PET resin and polyester staple fiber segments ofthe polyester market, offset by inherent industry cyclicality,considerable competitive pressure from foreign producers primarilyin Asia, and exposure to volatile raw material costs, which arelikely to remain high throughout 2006. The ratings are supportedby continued growth in demand for PET container products andsufficient availability under committed bank facilities.

Wellman, with about $1.4 billion in annual revenues, is a narrowlyfocused U.S.-based chemical company. The company producespolyester staple fibers primarily for the home furnishing,fiberfill, and apparel markets and is the second-largest producerof PET resins used in beverage bottles and food containers.Despite Wellman's strong market share of the U.S. market, thecompany lacks the diversity of some of its competitors andindustry peers, which heightens its exposure to industrydownturns.

Adequate liquidity and a manageable debt maturity profile duringthe next couple of years add some support to Wellman's creditquality, particularly if business conditions begin to stabilize.However, ratings could be lowered in the next year if PET resinmarkets weaken more than expected as a result of resin capacityadditions or increasing imports, or if continued raw materialprice volatility affects operating results.

Type of Business: Western Apartment originally filed for chapter 11 protection on April 18, 2006 (Bankr. S.D. Calif. Case No. 06-00821). The Debtor obtained permission from the U.S. Bankruptcy Court for the Southern District of California to have their chapter 11 case transferred to the District of Hawaii bankruptcy court.

WHITNEY INFORMATION: March 31 Balance Sheet Upside Down at $42.2MM------------------------------------------------------------------Whitney Information Network, Inc., reported revenue for the threemonths ended March 31, 2006, of $45.3 million, 17.9% over therestated prior year amount of $38.4 million and a net loss of $3.5million versus a restated net earnings of $800,000 in thecomparable 2005 period.

At March 31, 2006, the Company's balance sheet showed $106.8million in total assets and $149 million in total liabilities,resulting in a $42.2 million stockholders' deficit.

The Company's March 31 balance sheet also showed strainedliquidity with $69.2 million in total current assets available topay $142.9 million in total current liabilities coming due withinthe next 12 months.

Q1 2006 Highlights:

-- Paid student attendance increased 18.7% over the same period in 2005

-- Cash flows provided by operations amounted to $8.7 million, versus $6.7 million, a 30.2% increase over the same period in 2005

-- Cash, cash equivalents and restricted cash totaled $43.7 million at March 31, 2006 versus $13.3 million at March 31, 2005

On May 15, 2006, the Company disclosed that it would restatecertain historical financial results. The financial restatementsfor the quarter ended March 31, 2005, reflect:

-- a modification associated with a change in revenue recognition policy and restatement of revenue from expired courses;

-- reclassifications in financial statement categories and the timing of accruals necessary for comparability to the current period's presentation; and

-- a revision to the revenue recognition policy with respect to deferral of revenue from the Company's teleconferencing product and service offering and subscription services.

The Company is in the process of amending its Annual Reports onForm 10-K for the years ended 2003 through 2005 to reflect certainpolicy revisions and the effect of such revisions on itshistorical Consolidated Financial Statements.

Headquartered in Cape Coral, Florida, Whitney Information Network,Inc. (OTCBB: RUSSE) -- http://www.russwhitney.com/-- provides financial education and training services through seminars,workshops and publications. The educational and training servicesare concentrated in the area of financial management and realestate investment. The Company markets its services and productsprimarily through periodic publications, telemarketing, televisionand radio. The Company also develops and markets educationalresource materials which are prepared to support course offeringsand for sale to the general public. The courses are provided inthe United States, Canada and the United Kingdom.

WINN-DIXIE: Prepares Financial Projections Underpinning Plan------------------------------------------------------------Winn-Dixie Stores, Inc., and its debtor-affiliates preparedfinancial projections for fiscal years 2007 to 2011 in connectionwith their Joint Plan of Reorganization.

Pursuant to Section 1129(a)(11), the Court is required todetermine that the confirmation of the Plan is not likely to befollowed by the liquidation or the need for further financialreorganization of the Debtors.

Based on the Debtors' financial projections, the ReorganizedDebtors should have sufficient cash flow to pay and service theirdebt obligations and to fund their operations, according to H.Jay Skelton, chairman of Winn-Dixie Stores, Inc.'s board ofdirectors.

Cash & cash equivalents at beginning of period 34,377 58,225 ---------- ----------Cash and cash equivalents at end of period $58,225 $155,971 ========== ==========

Mr. Skelton notes that the Financial Projections are based onnumerous assumptions, including confirmation and consummation ofthe Plan in accordance with its terms; realization of theoperating strategy of the Reorganized Debtors; industryperformance; no material adverse changes in applicablelegislation or regulations, or generally accepted accountingprinciples; and no material adverse changes in general businessand economic conditions.

(i) all members of an impaired class of claims or interests have accepted the Plan; or

(ii) the Plan will provide a member who has not accepted the Plan with a recovery value greater than the amount the member would get if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code.

H. Jay Skelton, chairman of Winn-Dixie Stores, Inc.'s board ofdirectors, asserts that holders of prepetition unsecured claimswould recover less in a Chapter 7 liquidation than what theywould receive under the Plan.

According to the Debtors' Liquidation Analysis, in a hypotheticalChapter 7 liquidation commencing June 30, 2006:

WINN-DIXIE: Intends to Honor Secured Claims Under Various Pacts---------------------------------------------------------------Pursuant to their Joint Plan of Reorganization, Winn-Dixie Stores,Inc., and its debtor-affiliates intend to continue theirobligations with respect to secured claims existing under theterms of these agreements:

(i) the Application and Agreement for Standby Letter of Credit, dated as of Dec. 6, 2001, as modified on April 29, 2002, between AmSouth Bank and Winn-Dixie;

(ii) the Assumption Agreement dated as of October 12, 2000, among Winn-Dixie as assuming borrower, Gooding's Supermarket, Inc., as original borrower, and Lutheran Brotherhood, now known as Thrivent Financial for Lutherans, as lender; and

(iii) the Teradata Purchase Addendum dated as of December 22, 2004, between Winn-Dixie and NCR Corporation.

This will result in a continuing contingent obligation withrespect to the AmSouth claim of about $17,000,000 and securedpayment obligations with respect to the Thrivent/Lutherans andNCR claims of approximately $3,800,000 in the aggregate.

In addition, the Debtors will have approximately $31,300,000 ofsecured payment obligations with respect to Secured Tax Claimsand other secured obligations as may be identified.

X-RITE INC: Completes $280 Million Amazys Holding Acquisition-------------------------------------------------------------X-Rite, Incorporated, completed its acquisition of Amazys HoldingAG for a purchase price of CHF77 per share plus 2.11 shares of X-Rite, Incorporated stock for each Amazys share. The totalpurchase price on the settlement date of July 5, 2006 was $280million. The acquisition was financed through a combination ofcash, debt and X-Rite stock. Amazys develops, markets andsupports hardware, software and services to measure andcommunicate color under the GretagMacbeth brand. The combinedcompany will be called X-Rite, Incorporated.

The combined company expects to achieve approximately $25 millionof annual operating expense savings in connection with thetransaction in year three. The company expects to incur cashrestructuring costs totaling $20 million during the first threeyears. The transaction is expected to be accretive to X-Rite'scash EPS during year two of the combined operations.

"Our new company combines top notch talent, technology andproducts in the color industry," said Michael C. Ferrara, X-RiteCEO. "We expect our expertise, talent and technology to help usexpand the global color market through innovation."

Organization of the Combined Entity

A strong team of X-Rite and GretagMacbeth executives lead thecombined organization. Michael C. Ferrara is the CEO, Thomas J.Vacchiano, Jr. is the President and COO, Mary E. Chowning is theCFO, and Dr. Francis Lamy is the CTO. The X-Rite Board ofDirectors is now comprised of nine members, including six currentdirectors of X-Rite and three former directors of Amazys HoldingAG.

"I am confident that the new X-Rite Board of Directors and seniormanagement team under the leadership of Michael C. Ferrara, CEO,will ensure that X-Rite excels in every aspect of the business,"John Utley, X-Rite Chairman, said. "The combined company ispoised to lead the future of the color industry and maximizeshareholder value."

The global headquarters for the combined entity is in Grandville,Michigan, with European headquarters in Regensdorf, Switzerland,and Asia Pacific headquarters in Hong Kong. X-Rite will berepresented by the new logo, incorporating the core colors of bothcompanies, and symbolizing how our shared values and goals willdrive this new company.

Financing and Listing on the SWX Exchange

The cash portion of the transaction was financed through acombination of cash on hand and new borrowings. Goldman Sachsprovided a total debt package of $220 million to fund thetransaction and post-closing working capital needs. Concurrentwith the settlement X-Rite has established a secondary listing onthe SWX Swiss Exchange.

X-Rite was advised exclusively by Headwaters MB for investmentbanking and financial advisory services, including securing debtfinancing which has been committed by Goldman Sachs. X-Rite'sother advisors include McDermott Will & Emery LLP and WengerPlattner for legal advice. Amazys Holding AG was advised byCredit Suisse for investment banking and financial advice, and byLenz & Staehelin for legal advice.

As reported in the Troubled Company Reporter on May 29, 2006,Standard & Poor's Rating Services assigned its 'B+' corporatecredit rating to Grandville, Michigan-based X-Rite Inc. Theoutlook is stable.

At the same time, Standard & Poor's assigned a 'B+' rating and arecovery rating of '2' to the company's proposed first-lien loan,which amounts to $160 million (a term loan of $120 million and anundrawn revolving credit facility of $40 million).

As reported in the Troubled Company Reporter on May 23, 2006,Moody's Investors Service assigned a first-time corporate familyrating of B1 to X-Rite, Inc., B1 to X-Rite's proposed seniorsecured first priority term loan and revolver and B3 to theproposed senior secured second priority term loan.

The ratings outlook is stable.

* BOND PRICING: For the week of July 3 - July 7, 2006-----------------------------------------------------

Monday's edition of the TCR delivers a list of indicative pricesfor bond issues that reportedly trade well below par. Prices areobtained by TCR editors from a variety of outside sources duringthe prior week we think are reliable. Those sources may not,however, be complete or accurate. The Monday Bond Pricing tableis compiled on the Friday prior to publication. Prices reportedare not intended to reflect actual trades. Prices for actualtrades are probably different. Our objective is to shareinformation, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy orsell any security of any kind. It is likely that some entityaffiliated with a TCR editor holds some position in the issuers'public debt and equity securities about which we report.

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